Real Estate Investment Fundamental


Post-Science Institute

Land appreciation is the key to real estate investment. However, holding raw land has a continuing expense. Thus, the most efficient commercial real estate investment strategy is to buy investment properties with just enough improvement on the land and the minimum amount of down payment to keep the cash flows breaking even with the expenses.

With the above qualitative understanding, the next most important consideration in real estate investment is what price to pay or what would be the rate of return for a given price paid or offered.

To determine the price or to calculate the rate of return, when the price is given, three basic elements are involved:
(1) Research: Collecting information needed to obtain correct input data (e.g. Marcus and Millichap market research data and rental data from apartment managers),
(2) Input date management: Analyzing collect information on input data (e.g. Argus Lease By Lease software and Microsoft Excel), and
(3) Valuation: translating the input data into a price or the rate of return, when the price is known (e.g. the Infinite Spreadsheet described at and, NOT market comparison of prices or Discounted Cash Flow Method, which are fatally flawed

In practice, the combination of the three products can create a Dream Team For Commercial Real Estate Brokerage are: (1) Research from Marcus and Millichap, (2) Lease By Lease software from Argus, and (3) Infinite Spreadsheet from Post-Science Institute. However, (1) and (2) above can be replaced, respectively, by, for example, property management companies and spreadsheets.

The Infinite Spreadsheet (3) can determines a price without assuming a resale price with ALL the inputs obtainable from market comparison.

Home Page