System and Methods for Management of Real Property

• US 20110218937A1
• Filed: 03/03/2010
• Published: 09/08/2011
• Est. Priority Date: 03/03/2010
• Status: Abandoned Application

• Current Assignee: Jeremy Elser
• Original Assignee: Jeremy Elser
• Inventors: Elser, Jeremy
• Application Number:
  US12/716,750
• Publication Number:
  US 20110218937A1
• Time in Patent Office: Days
• US Class Current: 705/36.T
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies
• CPC Class Codes: G06Q 99/00 Subject matter not provided for in other groups of this subclass

Abstract

Computer systems and methods enable an individual to simulate real estate/financial transactions over time, provide accounting and cash flow management for management of real estate investments, and track property values for rental properties taking into account tenant creditworthiness (tenant credit score) and the like. The computer system calculates a tenant reliability score (TRS) that can be used when an individual real estate investor is contemplating whether to enter into a lease with a tenant. A lower TRS would alert the landlord that the tenant may not be a good risk which would decrease the expected future value of rental property. A simulator preferably incorporates the TRS into cash flow projections such that the investor could compare different potential tenants and. Financial tracking modules enable the real estate investor to track the equity value of his or her real estate investments, cash flow, and to provide data useful for buy/sell decisions.

Claims

1. A computer-implemented method of monitoring the financial performance of at least one managed real property unit over time, comprising:

the computer receiving at least one set of parameters related to purchasing and optionally disposing of said at least one managed real property unit;

the computer receiving at least one set of parameters related to ongoing maintenance costs of said at least one managed real property unit;

the computer receiving at least one set of parameters related to rental income associated with said at least one managed real property unit;

the computer calculating the cash and/or equity position of said at least one managed real property unit at different points in time;

the computer receiving modified data based on transactions affecting the cash and/or equity position of said at least one managed real property unit and recalculating the cash and/or equity position of said at least one managed real property unit based on said modified data; and

displaying the recalculated cash and/or equity position of said at least one managed real property unit.

2. The method of claim 1, further comprising the computer determining aggregate cash and/or equity positions over at least two managed real property units in a real estate investment portfolio and displaying the aggregate cash and/or equity positions in such a way that the relative value of one real property unit to another may be ascertained from the display.

3. The method of claim 2, further comprising the computer generating income statements reflecting the cash and/or equity position of said at least one managed real property unit and/or income statements reflecting the aggregate cash and/or equity position of said at least two managed real property units.

4. The method of claim 1, wherein the parameters related to purchasing and optionally disposing of said at least one managed real property unit comprise property name, initial cost, closing cost, tax, insurance, estimated selling price, estimated time of sale, or a combination thereof for each said at least one managed real property unit.

5. The method of claim 1, wherein the parameters related to ongoing maintenance costs of said at least one managed real property unit comprises an outstanding loan, associated loan interest rate, tax, insurance, maintenance cost, miscellaneous associated expenses, depreciation/amortization schedule, or a combination thereof for each said at least one managed real property unit.

6. The method of claim 5, wherein said associated loan interest rate is variable.

7. The method of claim 1, wherein the transactions comprise receiving money, expending money, or combinations thereof.

8. The method of claim 2, wherein the aggregate cash and/or equity positions are determined based on financial transactions including cumulative money received for all real property units, cumulative money expended for all real property units, purchase, sale, and/or refinancing of real property units, adjustment of loan rates, variation of depreciation periods for the real property units, or combinations thereof.

9. The method of claim 1, wherein the computer generates warning messages regarding the cash or equity position in response to an actual or proposed transaction affecting the cash and/or equity position of said at least one manage real property unit.

10. The method of claim 3, wherein the income statement comprises annual effective gross income, annual net operating income and annual taxable income for said at least one managed real property unit.

11. The method of claim 10, wherein the effective gross income is calculated based on gross rents possible, other income, potential income, and vacancy of said at least one managed real property unit.

12. The method of claim 11, wherein the gross rents possible is calculated by following a progression of best estimates based on available rent data for said at least one managed real property unit.

13. The method of claim 2 wherein the computer generates a comparison report that compares Net Flip Income and Net Monthly Income of every one managed real property unit with another managed real property unit.

14. The method of claim 13, wherein the Net Flip Income of a managed real property unit is calculated based on Resale Price, Purchase Price, and Rehab/Hold Price.

15. The method of claim 13, wherein the Net Monthly Cash Flow for a managed real property unit is calculated based on Monthly Revenue, Monthly Loans, Monthly Taxes, Monthly Insurance, and Monthly Miscellaneous Costs for the managed real property unit.

16. A computer-implemented method for managing real property, the method comprising:

receiving a first set of parameters on a processor, wherein the first set of parameters comprises a financial parameter describing the financial status of the real property, a property parameter defining the real property, and a rental status parameter describing the rental status of the real property;

generating, on the processor, a first scenario based upon the received first set of parameters;

receiving an indication of a variance in at least one of the financial parameter, the property parameter, or the rental status parameter;

creating a second set of parameters based on the indication received;

generating a second scenario based on the varied second set of parameters that preserves the first scenario and identifies parameter values at another point in time; and

displaying the second scenario.

17. The computer-implemented method of claim 16, further comprising saving at least one of the first or the second scenarios to a memory.

18. The computer-implemented method of claim 17, wherein receiving a first set of parameters comprises retrieving a saved scenario from the memory.

19. The computer-implemented method of claim 16, wherein the first set of parameters is based on real data that exists with regard to the managed real property.

20. The computer-implemented method of claim 16, wherein at least one of the parameters of the second set of parameters is based on at least one of hypothetical data, fictional data, or projected data.

21. The computer-implemented method of claim 16, wherein the financial parameter further comprises at least one of a checking account balance, a savings account balance, a loan balance, or a mortgage balance.

22. The computer-implemented method of claim 16, wherein the property parameter comprises at least one of the following:

a unit name, a purchase price, an asking price, a rental amount, a rent payment frequency, a rent payment schedule, property insurance information, or property taxes.

23. A method for determining reliability of a tenant of a managed rental property comprising:

receiving standard metrics of the tenant;

receiving payment history statistics of the tenant;

receiving the tenant'"'"'s ability to pay;

receiving national statistics relating to the tenant;

calculating a reliability score of the tenant based on the standard metrics, the payment history, the ability to pay and the national statistics; and

displaying the reliability score of the tenant.

24. The method of claim 23, wherein standard metrics of the tenant further comprise a credit score for the tenant.

25. The method of claim 24 further comprising calculating a Z score by taking the tenant'"'"'s credit score, subtracting the national average credit score, and dividing by a standard deviation of a credit score random variable.

26. The method of claim 23 wherein standard metrics of the tenant further comprise an average credit score for more than one tenant.

27. The method of claim 25 further comprising calculating a Z score by taking the tenant'"'"'s average credit score, subtracting the national average credit score, and dividing by the standard deviation of the credit score random variable.

28. The method of claim 23 wherein ability to pay of the tenant comprise reliability data of an employer that provides the tenant'"'"'s income data.

29. The method of claim 28 wherein reliability data of an employer that provides the tenant'"'"'s income is determined based on data comprising who employs the tenant, number of employees employed by the employer, the profitability of the employer, financial data of the employer, other valuation measures of the employer, or combinations thereof.

30. The method of claim 23 wherein ability to pay of the tenant further comprise national, regional, and/or local statistics.

31. The method of claim 23 wherein ability to pay of the tenant is calculated by taking the annual income of the tenant'"'"'s family and dividing that by the annual rent, using the information from the assigned lease.

32. The method of claim 23 wherein payment history parameters of the tenant further comprise on-time payment data as well as length of time until payment is recorded.

33. The method of claim 23 wherein payment history parameters of the tenant further comprise on-time payment data and length of time until payment is recorded for past rental properties.

34. A system for monitoring the financial performance of at least one managed real property unit over time, the system comprising:

a memory that stores at least one set of parameters related to purchasing and optionally disposing of said at least one managed retail property unit, at least one set of parameters related to ongoing maintenance costs of said at least one managed real property unit, and at least one set of parameters related to rental income associated with said at least one managed real property unit; and

a processor configured to calculate the cash and/or equity position of said at least one managed real property unit at different points in time, and said processor configured to receive modified data based on transactions affecting the cash and/or equity position of said at least one managed real property unit and recalculating the cash and/or equity position of said at least one managed real property unit based on said modified data; and

a display for displaying the recalculated cash and/or equity position of said at least one managed real property unit.

35. The system of claim 34, wherein the processor further determines aggregate cash and/or equity positions over at least two managed real property units in a real estate investment portfolio and the display displays the aggregate cash and/or equity positions in such a way that the relative value of one real property unit to another may be ascertained from the display.

36. The system of claim 35, wherein the processor further generates income statements reflecting the cash and/or equity position of said at least one managed real property unit and/or income statements reflecting the aggregate cash and/or equity position of said at least two managed real property units.

37. The system of claim 34, wherein said associated loan interest rate is variable.

38. The system of claim 35, wherein the aggregate cash and/or equity positions are determined based on financial transactions including cumulative money received for all real property units, cumulative money expended for all real property units, purchase, sale, and/or refinancing of real property units, adjustment of loan rates, variation of depreciation periods for the real property units, or combinations thereof.

39. The system of claim 34, wherein the processor generates warning messages regarding the cash or equity position in response to an actual or proposed transaction affecting the cash and/or equity position of said at least one manage real property unit.

40. The system of claim 35 wherein the processor generates a comparison report that compares Net Flip Income and Net Monthly Income of every one managed real property unit with another managed real property unit.

41. The system of claim 34, wherein the memory further stores a first set of parameters including a financial parameter describing the financial status of the real property, a property parameter defining the real property, and a rental status parameter describing the rental status of the real property, and wherein the processor generates a first scenario based upon the received first set of parameters, the processor further receiving an indication of a variance in at least one of the financial parameter, the property parameter, or the rental status parameter, creating a second set of parameters based on the indication received, and generating a second scenario based on the varied second set of parameters that preserves the first scenario and identifies parameter values at another point in time, and wherein said display displays the second scenario.

42. The system of claim 41, wherein the memory stores at least one of the first or the second scenarios.

43. The system of claim 42, wherein the processor retrieves a scenario containing the first set of parameters from the memory.

44. The system of claim 41, wherein at least one of the parameters of the second set of parameters is based on at least one of hypothetical data, fictional data, or projected data.

45. The system of claim 34, wherein the memory further stores standard metrics of the tenant, receiving payment history statistics of the tenant, the tenant'"'"'s ability to pay, and national statistics relating to the tenant, the processor further determines reliability of the tenant by calculating a reliability score of the tenant based on the standard metrics, the payment history, the ability to pay and the national statistics, and the display displays the reliability score of the tenant.

46. The system of claim 45, wherein the processor further calculates a Z score by taking the tenant'"'"'s credit score, subtracting the national average credit score, and dividing by a standard deviation of a credit score random variable.

47. The system of claim 45 wherein the processor further calculates a Z score by taking the tenant'"'"'s average credit score, subtracting the national average credit score, and dividing by the standard deviation of the credit score random variable.

48. The system of claim 45 wherein payment history parameters of the tenant further comprise on-time payment data as well as length of time until payment is recorded.

49. The system of claim 45 wherein payment history parameters of the tenant further comprise on-time payment data and length of time until payment is recorded for past rental properties.

50. A computer-readable storage medium storing computer executable instructions thereon that when processed by a computer cause the computer to implement a method of monitoring the financial performance of at least one managed real property unit over time, said storage medium comprising:

cash calculation code that calculates the cash and/or equity position of said at least one managed real property unit at different points in time;

cash recalculation code that recalculates the cash and/or equity position of said at least one managed real property unit based on said computer receiving modified data based on transactions affecting the cash and/or equity position of said at least one managed real property unit; and

display code that displays the recalculated cash and/or equity position of said at least one managed real property unit on a display,

wherein said cash recalculation code and/or cash calculation code calculations are based on at least one of a set of parameters related to purchasing and optionally disposing of said at least one managed real property unit, at least one set of parameters related to ongoing maintenance costs of said at least one managed real property unit, and at least one set of parameters related to rental income associated with said at least one managed real property unit.

51. The medium of claim 50, further comprising aggregate cash/equity code that determines aggregate cash and/or equity positions over at least two managed real property units in a real estate investment portfolio and displays the aggregate cash and/or equity positions in such a way that the relative value of one real property unit to another may be ascertained from the display.

52. The medium of claim 51, further comprising income statement generation code that generates income statements reflecting the cash and/or equity position of said at least one managed real property unit and/or income statements reflecting the aggregate cash and/or equity position of said at least two managed real property units.

53. The medium of claim 50, wherein said associated loan interest rate is variable.

54. The medium of claim 51, wherein the aggregate cash and/or equity positions are determined based on financial transactions including cumulative money received for all real property units, cumulative money expended for all real property units, purchase, sale, and/or refinancing of real property units, adjustment of loan rates, variation of depreciation periods for the real property units, or combinations thereof.

55. The medium of claim 50, further comprising warning generating code that generates warning messages regarding the cash or equity position in response to an actual or proposed transaction affecting the cash and/or equity position of said at least one manage real property unit.

56. The medium of claim 51 further comprising report generating code that generates a comparison report that compares Net Flip Income and Net Monthly Income of every one managed real property unit with another managed real property unit.

57. The medium of claim 50, further comprising code for receiving and storing a first set of parameters including a financial parameter describing the financial status of the real property, a property parameter defining the real property, and a rental status parameter describing the rental status of the real property, and simulator code that generates a first scenario based upon the received first set of parameters and, upon receiving an indication of a variance in at least one of the financial parameter, the property parameter, or the rental status parameter, creates a second set of parameters based on the indication received and generates a second scenario based on the varied second set of parameters that preserves the first scenario and identifies parameter values at another point in time, wherein said display code displays the second scenario.

58. The medium of claim 57, wherein the simulator code retrieves a scenario containing the first set of parameters from a memory.

59. The medium of claim 57, wherein at least one of the parameters of the second set of parameters is based on at least one of hypothetical data, fictional data, or projected data.

60. The medium of claim 50, further comprising code for receiving and storing standard metrics of the tenant, receiving payment history statistics of the tenant, the tenant'"'"'s ability to pay, and national statistics relating to the tenant, and tenant reliability code that determines reliability of the tenant by calculating a reliability score of the tenant based on the standard metrics, the payment history, the ability to pay and the national statistics, wherein the display code displays the reliability score of the tenant.

61. The medium of claim 60, wherein the tenant reliability code further calculates a Z score by taking the tenant'"'"'s credit score, subtracting the national average credit score, and dividing by a standard deviation of a credit score random variable.

62. The medium of claim 60 wherein the tenant reliability code further calculates a Z score by taking the tenant'"'"'s average credit score, subtracting the national average credit score, and dividing by the standard deviation of the credit score random variable.

63. The medium of claim 60 wherein payment history parameters of the tenant further comprise on-time payment data as well as length of time until payment is recorded.

64. The medium of claim 60 wherein payment history parameters of the tenant further comprise on-time payment data and length of time until payment is recorded for past rental properties.