OPTIMIZING RETURN ON INVESTMENT IN REAL PROPERTY

• US 20140279692A1
• Filed: 03/10/2014
• Published: 09/18/2014
• Est. Priority Date: 03/12/2013
• Status: Active Application

• Current Assignee: Brad A. Boothby, Byron L. Hanchett
• Original Assignee: Brad A. Boothby, Byron L. Hanchett
• Inventors: Boothby, Brad A., Hanchett, Byron L.
• Application Number:
  US14/202,022
• Publication Number:
  US 20140279692A1
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 10/04 Forecasting or optimisation specially adapted for administrative or management purposes, e.g. linear programming or "cutting stock problem" market predictions or forecasting for commercial activities G06Q30/0202
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The present invention is directed to a system and method comprising an expert system that provides a logical step by step decision making support system that assists and guides an actual or potential real property investor, borrower, lender, appraiser, or assessor in optimizing the components of return on a real property, investment or loan, that is embodied in a computer-implemented web-based environment. The method of the present invention contains six major phases—Qualifying, Valuation, Developing and Deciding on Alternatives, Marketing, Negotiation and Closing, and the Post Closing Phase. The system guides the user in ordering and executing the method steps within each of the six major phases. The principle advantage of this invention is that the method of the present invention is a decision support system that provides those transacting business in these market a means of optimizing their return on investment by reducing transaction cost, time, uncertainty, and risk.

Claims

1. A computer-implemented web-based system for optimizing return on investment in real property comprising:

a) a qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

b) a valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

c) a developing and deciding on alternatives phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

d) a marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

e) a negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens; and

f) a post-closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

whereby the system guides the user in ordering and executing the calculations within each of the six major phase modules by employing a unified decision support system that provides those transacting business in the real estate market a means of optimizing their return on investment by reducing transaction cost, time, uncertainty, and risk.

2. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) derive the Weighted Average Net Effective Rental Rate that produces the user'"'"'s target value using the Income Approach to Value; and

(b) derive a range of property values that include the user'"'"'s target value by varying the amount of the capitalization rate and rental rate while holding the amounts for the remaining elements of the Income Approach to Value constant;

whereby the system generates a matrix of property values using the Income Approach to Value by varying the rental rate and the capitalization rate to guide the user in deriving the property'"'"'s current value and the user'"'"'s target value for comparison with the property'"'"'s market value to determine the feasibility/advisability of moving forward with the next phase, namely, the valuation phase.

3. The computer-implemented web based system for optimizing return on investment in real property according to claim 2, wherein said qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) derive the occupancy cost and ranked amenities for a specific lease by deriving Net Effective Rent for the period of the lease and the average Yearly Net Effective Rental Rate for the period of the lease using Rental Increases that are defined by a period of months rather than lease anniversary dates and are calculated by entering a percentage increase and a new rental rate with other being calculated and displayed, and Rent Abatement by a percent of specific months rather than beginning abatement periods on lease anniversary dates and calculating abatement in whole months;

(b) calculate Total Net Effective Occupancy Cost for the Lease and the Net Present Value of the Net Effective Occupancy Cost for the lease period using Parking by type and cost per type for year one of the lease and then escalating year one over the period of the lease by a user entered percentage, and Tenant Improvement and Miscellaneous costs escalated over the period of the lease by a user entered percentage; and

(c) derive an amenity score by multiplying user entered number reflecting the importance of that amenity by a user entered number rating the quality of the amenity;

whereby the system displays the results of the calculations described in (a), (b), and (c) above for comparison with but not limited to the user'"'"'s target lease requirements,

the terms associated with competitive space that is being marketed for lease, and the property'"'"'s Releasing Assumptions.

4. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) derive tenant reimbursed expense amounts;

(b) derive the amount of the increase in property taxes to be paid by a new owner when specific leases put the burden of such increases on the owner;

(c) derive the amount for a property expense type when the owner has agreed to pay for that property expense type in the tenant'"'"'s lease; and

(d) generate audit reports;

whereby the system using user audited occupancy income and expense data calculates the Net Operating Income for the Property thereby increasing the user'"'"'s confidence and understanding of the accuracy of the calculations and how the property value is determined using the income approach to value.

5. The computer-implemented web based system for optimizing return on investment in real property according to claim 4, wherein said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) derive the structure of the target financing by deriving the type, amount, interest rate, and term of the first loan, debt service, and debt coverage ratio;

deriving the type, amount, interest rate, loan term and annual debt service of a second loan; and

deriving the down payment, total loan to value ratio, total debt coverage ratio, cash flow by valuation year and cash on cash return by valuation year;

whereby the system derives the terms of the financing for comparison with the terms available in the lending market to guide the user in developing the target financing.

6. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) calculate by Valuation Year the property'"'"'s Net Operating Income, Value, Value per Square Foot, Cash Flow, and Cash on Cash Return; and

(b) generate a dash board wherein a user can change the Offering Sale Price and Credit Loss Percentage and navigate from the dash board by way of links directly to Sale Capitalization Rate, Financing, Releasing Assumptions ordered by the Percentage of the property'"'"'s square footage they address/cover, Other Income, and the Going Out Capitalization Rate;

whereby the system displays a Valuation Summary by Valuation Year and the factors that affect value in the order they affect value—

Specifically the Sale Capitalization Rate, Financing, Releasing Assumptions ordered by the Percentage of the property'"'"'s square footage they address/cover, Other Income, and the Going Out Capitalization Rate to guide the user in selecting the factors to adjust and the amount to adjust them by in order to maximize the measures of return on investment set forth in (a).

7. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a system to:

(a) use discounted cash flows and Internal Rate of Return to value a property and includes deriving Pre-Tax Cash Flows by Valuation Year by employing data for Operating Cash Flow, Tenant Improvements, Leasing Commissions, Furniture, Fixtures &

Equipment, Capital Reserves, The Amount Lump Sum Planned Capital improvements, Pre-Tax Cash Flows, Pre-Tax Cash on Cash Returns, and Net Proceeds from Sale at the end of the valuation period;

(b) provide a dash board wherein a user can change the amount and Valuation Year for Lump Sum Capital Improvements;

(c) derive a range of property values using discounted cash flows to value the property wherein the range of property values is calculated using a range of incremented Internal Rates of Return; and

(d) provide a dash board wherein a user can change the Offering Sale Price and the system calculates the Offering Capitalization Rate, Leveraged Internal Rate of Return (IRR), and the Unleveraged Internal Rate of Return;

whereby the system displays a dash board including the measures of value set forth in (a) and a matrix of values showing by Internal Rate of Return the values for Price per Square Foot, Sale Price, Capitalization Rate, First Loan to Value Ratio, and Cash on Cash Return to guide the user in selecting and modifying the amounts for the measures set forth in (a) that will be discounted to arrive at the range of Internal Rates of Return displayed in the matrix which further guides the user in deciding on an Offering Sale Price with is associated Price per Square Foot, Capitalization Rate, First Loan To Value Ratio, and Cash on Cash Return which Offering Sale Price is entered and the system uses to calculate and display the Offering Capitalization Rate, Leveraged Internal Rate of Return and the Unleveraged Internal Rate of Return.

8. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said developing and deciding on alternatives phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) derive a pro form a using the income approach to value that includes debt service, loan to value ratio, debt coverage ratio, Operating Cash Flow, Equity, Operating Cash on Cash Returns, Capitalization Rate, Selling Price, and Price per Square Foot for a property whose occupancy income and expenses have been improved as the result of physical improvements so the results of the improvements can be compared with the property'"'"'s current financial performance measured using the same criteria; and

(b) use the Income Approach to Value including financing and increases in rent, other income, property taxes and other expenses to derive the financial performance of a target property over a projected holding period for comparison with financial performance of the property to be traded where the system calculates the projected changes in Operating Cash Flow, Market Value and Equity for the target property'"'"'s projected holding period if it is acquired pursuant to a Section 1031 Tax Deferred Exchange;

whereby the system displays the comparisons to guide the user in maximizing their return on investment when deciding to improve a property and trade a property.

9. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said post-closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) derive a comparison of the cost and income associated with renewing a tenant whose lease is expiring versus replacing such a tenant, where the system derives the cost of replacing a tenant and renewing a tenant using;

(i) the downtime in months for replacing and renewing a tenant;

(ii) the rentable square feet in the space with the expiring lease;

(iii) the rent per square foot to be charged to a new tenant and a renewing tenant;

(iv) the Tenant Improvement Cost to be incurred for a replacement tenant and a renewing tenant;

(v) the cost for leasing commissions for a replacement tenant and a renewing tenant; and

(vi) the discount rate to be used to derive the net present value associated with replacing a tenant and the net present value associated with renewing a tenant;

whereby the system displays the cost, income and net present value of replacing and renewing a tenant thereby guiding the user in their decision making process as leases are about to expire.

10. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) define properties that are similar according to a property profile employing data on property type including Office, Research and Development, Industrial, Warehouse, Flex, Retail, Multi-Family, Mini-Storage, Mobile Home Park and Marina Boat Slips;

property sub-type including Office sub-types, Courtyard, Mid-Rise, and High-Rise, Retail sub-types, Mall, Neighborhood, Strip, and stand-alone;

property class, geographic location, investment risk, age and Last year of Major Rehabilitation;

(b) score the property using min, max, and average duration remaining on existing leases, lease rate per square foot in existing leases, historical tenant turnover, and distribution of square footage among existing leases;

(c) score the market of the property'"'"'s profile by lease rate per square foot, historical length of lease, demographics of residences, traffic counts and lease space absorption rates;

(d) score the local economics of the property by tenant credit ratings, economic health of industries in which tenants conduct business, number of building permits in the approval process in the local economy for similar properties, economic health of geographic location for the property, and crime statistics for the geographic location for the property;

(e) score the existing owners of a property profile by credit rating, designated cash operating expenses;

(f) score the property'"'"'s price per square foot compared to a property profile;

(g) score the property'"'"'s ability to service debt compared to a property profile;

(h) score the downtime between leases compared to a property profile;

(i) score the expected change in Value by Valuation Year compared to a property profile; and

(j) score a property'"'"'s investment risk on a numerical scale ranging from passive to entrepreneurial;

whereby the system displays the property'"'"'s investment risk score on a numerical scale ranging from passive to entrepreneurial assisting the user in identifying the target buyer and lender without having to search, obtain, and understand third party market data.

11. The computer-implemented web based system for optimizing return on investment in real property according to claim 10, wherein said marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) allow a user to define criteria in the user'"'"'s target property profile and the system uses the criteria to search for matching property profiles made public by having been posted for sale and in need of a loan;

(b) when a user includes a target risk score in their target property profile, the system ranks the search results by the difference between the target risk score and the risk score of the posted property with the property with the smallest difference being ranked first; and

(c) said system provides the ability for the posting user (User one) to share access to a valuation with a searching user (User two);

whereby the property search results are limited to the user'"'"'s target property profile criteria and are ranked by the similarity of property profile risk scores thereby improving the quality of the search results which limits the search time and provides more immediate access to the valuation.

12. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) allow a user'"'"'s negotiation goal to be stated in a specific currency and entered by the user,

(b) actively make changes to the negotiation goal entered by the user as the negotiation proceeds;

(c) allow the other party'"'"'s opening offer to be entered by the user;

(d) allow the users counter offers to be entered by the user as they are made;

(e) allow the other party'"'"'s subsequent counter offers to be entered by the user as they are made;

(f) calculate the percentage by which the user would like to reduce the other party'"'"'s last concession to derive their next concession; and

(g) calculate the projected number of counter offer exchanges required for the user to reach their goal;

whereby each time the other party makes a counter offer and it is entered into the system, the system calculates and displays the counter offer the user should make to reach the user'"'"'s goal and the projected number of counter offer exchanges required to reach the user'"'"'s goal.

13. The computer-implemented web based system for optimizing return on investment in real property according to claim 1, wherein said negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes a system to:

(a) compare two different valuations for the same property; and

(b) compare a valuation with itself at a different point in time;

whereby the data differences are displayed thereby guiding a user in identify changes made to a copy shared with the other party to a negotiation so the user can better understand the basis for the other party'"'"'s negotiation position, offers, and counter offers and their impact on value; and

guide a new owner as they move forward from closing and model and make decisions and therefore changes to the valuation that reflected the closing price.

14. A method for making a computer-implemented web-based system for optimizing return on investment in real property comprising the steps of:

a) providing a qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

b) providing a valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

c) providing a developing and deciding on alternatives phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

d) providing a marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

e) providing a negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens; and

f) providing a post-closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens;

whereby the method guides the user in ordering and executing the calculations within each of the six major phase modules by employing a unified decision support system that provides those transacting business in the real estate market a means of optimizing their return on investment by reducing transaction cost, time, uncertainty, and risk.

15. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes a the steps of:

(a) deriving the Weighted Average Net Effective Rental Rate that produces the user'"'"'s target value using the Income Approach to Value; and

(b) deriving a range of property values that include the user'"'"'s target value by varying the amount of the capitalization rate and rental rate while holding the amounts for the remaining elements of the Income Approach to Value constant;

whereby the method generates a matrix of property values using the income Approach to Value by varying the rental rate and the capitalization rate to guide the user in deriving the property'"'"'s current value and the user'"'"'s target value for comparison with the property'"'"'s market value to determine the feasibility/advisability of moving forward with the next phase, namely, the valuation phase.

16. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 15, wherein providing said qualifying phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes the steps of:

(a) deriving the occupancy cost and ranked amenities for a specific lease by deriving Net Effective Rent for the period of the lease and the average Yearly Net Effective Rental Rate for the period of the lease using Rental Increases that are defined by a period of months rather than lease anniversary dates and are calculated by entering a percentage increase and a new rental rate with other being calculated and displayed, and Rent Abatement by a percent of specific months rather than beginning abatement periods on lease anniversary dates and calculating abatement in whole months;

(b) calculating Total Net Effective Occupancy Cost for the Lease and the Net Present Value of the Net Effective Occupancy Cost for the lease period using Parking by type and cost per type for year one of the lease and then escalating year one over the period of the lease by a user entered percentage, and Tenant Improvement and Miscellaneous costs escalated over the period of the lease by a user entered percentage; and

(c) deriving an amenity score by multiplying user entered number reflecting the importance of that amenity by a user entered number rating the quality of the amenity;

whereby the method displays the results of the calculations described in (a), (b), and (c) above for comparison with but not limited to the user'"'"'s target lease requirements,

the terms associated with competitive space that is being marketed for lease, and the property'"'"'s Releasing Assumptions.

17. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes the steps of:

(a) deriving tenant reimbursed expense amounts;

(b) deriving the amount of the increase in property taxes to be paid by a new owner when specific leases put the burden of such increases on the owner;

(c) deriving the amount for a property expense type when the owner has agreed to pay for that property expense type in the tenant'"'"'s lease; and

(d) generating audit reports;

whereby the method using user audited occupancy income and expense data calculates the Net Operating Income for the Property thereby increasing the user'"'"'s confidence and understanding of the accuracy of the calculations and how the property value is determined using the income approach to value.

18. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 17, wherein providing said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes the steps of:

(a) deriving the structure of the target financing by deriving the type, amount, interest rate, and term of the first loan, debt service, and debt coverage ratio;

deriving the type, amount, interest rate, loan term and annual debt service of a second loan; and

deriving the down payment, total loan to value ratio, total debt coverage ratio, cash flow by valuation year and cash on cash return by valuation year;

whereby the method derives the terms of the financing for comparison with the terms available in the lending market to guide the user in developing the target financing.

19. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes the steps of:

(a) calculating by Valuation Year the property'"'"'s Net Operating Income, Value, Value per Square Foot, Cash Flow, and Cash on Cash Return; and

(b) providing a dash board wherein a user can change the Offering Sale Price and Credit Loss Percentage and navigate from the dash board by way of links directly to Sale Capitalization Rate, Financing, Releasing Assumptions ordered by the Percentage of the property'"'"'s square footage they address/cover, Other Income, and the Going Out Capitalization Rate;

whereby the method displays a Valuation Summary by Valuation Year and the factors that affect value in the order they affect value—

Specifically the Sale Capitalization Rate, Financing, Releasing Assumptions ordered by the Percentage of the property'"'"'s square footage they address/cover, Other Income, and the Going Out Capitalization Rate to guide the user in selecting the factors to adjust and the amount to adjust them by in order to maximize the measures of return on investment set forth in (a).

20. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said valuation phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens further includes the steps of:

(a) using discounted cash flows and Internal Rate of Return to value a property and includes deriving Pre-Tax Cash Flows by Valuation Year by employing data for Operating Cash Flow, Tenant Improvements, Leasing Commissions, Furniture, Fixtures &

Equipment, Capital Reserves, The Amount Lump Sum Planned Capital Improvements, Pre-Tax Cash Flows, Pre-Tax Cash on Cash Returns, and Net Proceeds from Sale at the end of the valuation period;

(b) providing a dash board wherein a user can change the amount and Valuation Year for Lump Sum Capital Improvements;

(c) deriving a range of property values using discounted cash flows to value the property wherein the range of property values is calculated using a range of incremented Internal Rates of Return; and

(d) providing a dash board wherein a user can change the Offering Sale Price and the system calculates the Offering Capitalization Rate, Leveraged Internal Rate of Return (IRR), and the Unleveraged Internal Rate of Return;

whereby the method displays a dash board including the measures of value set forth in (a) and a matrix of values showing by Internal Rate of Return the values for Price per Square Foot, Sale Price, Capitalization Rate, First Loan to Value Ratio, and Cash on Cash Return to guide the user in selecting and modifying the amounts for the measures set forth in (a) that will be discounted to arrive at the range of Internal Rates of Return displayed in the matrix which further guides the user in deciding on an Offering Sale Price with is associated Price per Square Foot, Capitalization Rate, First Loan To Value Ratio, and Cash on Cash Return which Offering Sale Price is entered and the system uses to calculate and display the Offering Capitalization Rate, Leveraged Internal Rate of Return and the Unleveraged Internal Rate of Return.

21. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said developing and deciding on alternatives phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) deriving a pro form a using the income approach to value that includes debt service, loan to value ratio, debt coverage ratio, Operating Cash Flow, Equity, Operating Cash on Cash Returns, Capitalization Rate, Selling Price, and Price per Square Foot for a property whose occupancy income and expenses have been improved as the result of physical improvements so the results of the improvements can be compared with the property'"'"'s current financial performance measured using the same criteria; and

(b) using the Income Approach to Value including financing and increases in rent, other income, property taxes and other expenses to derive the financial performance of a target property over a projected holding period for comparison with financial performance of the property to be traded where the system calculates the projected changes in Operating Cash Flow, Market Value and Equity for the target property'"'"'s projected holding period if it is acquired pursuant to a Section 1031 Tax Deferred Exchange;

whereby the method displays the comparisons to guide the user in maximizing their return on investment when deciding to improve a property and trade a property.

22. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said post-closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) deriving a comparison of the cost and income associated with renewing a tenant whose lease is expiring versus replacing such a tenant, where the system derives the cost of replacing a tenant and renewing a tenant using;

(i) the downtime in months for replacing and renewing a tenant;

(ii) the rentable square feet in the space with the expiring lease;

(iii) the rent per square foot to be charged to a new tenant and a renewing tenant;

(iv) the Tenant Improvement Cost to be incurred for a replacement tenant and a renewing tenant;

(v) the cost for leasing commissions for a replacement tenant and a renewing tenant; and

(vi) the discount rate to be used to derive the net present value associated with replacing a tenant and the net present value associated with renewing a tenant;

whereby the method displays the cost, income and net present value of replacing and renewing a tenant thereby guiding the user in their decision making process as leases are about to expire.

23. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) defining properties that are similar according to a property profile employing data on property type including Office, Research and Development, Industrial, Warehouse, Flex, Retail, Multi-Family, Mini-Storage, Mobile Home Park and Marina Boat Slips;

property sub-type including Office sub-types, Courtyard, Mid-Rise, and High-Rise, Retail sub-types, Mall, Neighborhood, Strip, and stand-alone;

property class, geographic location, investment risk, age and Last year of Major Rehabilitation;

(b) scoring the property using min, max, and average duration remaining on existing leases, lease rate per square foot in existing leases, historical tenant turnover, and distribution of square footage among existing leases;

(c) scoring the market of the property'"'"'s profile by lease rate per square foot, historical length of lease, demographics of residences, traffic counts and lease space absorption rates;

(d) scoring the local economics of the property by tenant credit ratings, economic health of industries in which tenants conduct business, number of building permits in the approval process in the local economy for similar properties, economic health of geographic location for the property, and crime statistics for the geographic location for the property;

(e) scoring the existing owners of a property profile by credit rating, designated cash operating expenses;

(f) scoring the property'"'"'s price per square foot compared to a property profile;

(g) scoring the property'"'"'s ability to service debt compared to a property profile;

(h) scoring the downtime between leases compared to a property profile;

(i) scoring the expected change in Value by Valuation Year compared to a property profile; and

(j) scoring a property'"'"'s investment risk on a numerical scale ranging from passive to entrepreneurial;

whereby the method displays the property'"'"'s investment risk score on a numerical scale ranging from passive to entrepreneurial assisting the user in identifying the target buyer and lender without having to search, obtain, and understand third party market data.

24. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 23, wherein providing said marketing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) allowing a user to define criteria in the user'"'"'s target property profile and the system uses the criteria to search for matching property profiles made public by having been posted for sale and in need of a loan;

(b) further when a user includes a target risk score in their target property profile, the system ranks the search results by the difference between the target risk score and the risk score of the posted property with the property with the smallest difference being ranked first; and

(c) said system provides the ability for the posting user (User one) to share access to a valuation with a searching user (User two);

whereby the property search results are limited to the user'"'"'s target property profile criteria and are ranked by the similarity of property profile risk scores thereby improving the quality of the search results which limits the search time and provides more immediate access to the valuation.

25. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) allowing a user'"'"'s negotiation goal to be stated in a specific currency and entered by the user;

(b) actively making changes to the negotiation goal entered by the user as the negotiation proceeds;

(c) allowing the other party'"'"'s opening offer to be entered by the user;

(d) allowing the user'"'"'s counter offers to be entered by the user as they are made;

(e) allowing the other party'"'"'s subsequent counter offers to be entered by the user as they are made;

(f) calculating the percentage by which the user would like to reduce the other party'"'"'s last concession to derive their next concession; and

(g) calculating the projected number of counter offer exchanges required for the user to reach their goal;

whereby each time the other party makes a counter offer and it is entered into the system, the system calculates and displays the counter offer the user should make to reach the user'"'"'s goal and the projected number of counter offer exchanges required to reach the user'"'"'s goal.

26. The method for making a computer-implemented web based system for optimizing return on investment in real property according to claim 14, wherein providing said negotiation and closing phase software module stored within a computer memory and capable of accepting user data input and generating data output visually on display screens, further includes the steps of:

(a) comparing two different valuations for the same property; and

(b) comparing a valuation with itself at a different point in time;

whereby the data differences are displayed thereby guiding a user in identify changes made to a copy shared with the other party to a negotiation so the user can better understand the basis for the other party'"'"'s negotiation position, offers, and counter offers and their impact on value; and

guide a new owner as they move forward from closing and model and make decisions and therefore changes to the valuation that reflected the closing price.