Before moving to the principal side of the business, I began my career as a self-described real estate investment specialist, largely working as a land broker but dabbling in other areas including the popular “single-family flip” space. In all honesty, I wasn’t qualified for the title. In fact, I had little to no actual experience investing in real estate. But as is the case with many young brokers, to bring in business I had little choice but to follow the oft-repeated refrain: “fake it ’til ya make it.”
Those were the days of the late night television, “buy with no money down and become a millionaire instantly”, real estate training shysters. Every Dick, Tom, and Harriet was “investing” in real estate – driving up valuations to unsustainable levels and setting themselves and others up for eventual ruin. And while, to a certain extent I too got caught up in the irrational exuberance, it was a unique training ground for a burgeoning career in real estate.
You might also like my single family home construction pro forma for home builders.
As I picked up more and more clients and bird-dogged one single-family flipping opportunity after another, I became quite good at developing tools for analyzing the financial feasibility of those investments. And since that time, my capabilities with Excel, real estate valuation, and financial modeling have only continue to grow.
So in that vein, I present to you my Excel Pro Forma for Flipping Houses.
Excel Pro Forma for Flipping Houses
This Excel Pro Forma is meant to help the residential real estate investor make an initial assessment of a prospective property. It is a “back-of-the-envelope” model capable of estimating the potential profit, assess the cash required to completion, and arrive at an appropriate purchase price for the home.
It’s purposely simple, clean, and made to be filled out in a matter of minutes. This also means it lacks the complexity of a full financial model, but works great at the early stages of a flip to sift out the non-viable deals.
Quick Guide to Using the Excel Spreadsheet
After downloading the file (see download link below), open the file in Excel 2007 or newer for Windows or Excel 2011 or newer for Mac. The file is a macro-enabled workbook, with two macros included – one for adding new budget rows and the second for the purchase price finder tool. The file will initially ask you to click to enable the macros.
With the file open, you will first fill out the assumptions (blue font cells) on the Inputs tab and then head to the Reports tab to view the results of your assumptions.
Basic Pro Forma Rules
- Blue font cells are mandatory input cells
- Orange font cells are optional input cells
- Black font cells are calculation/output cells (DO NOT CHANGE)
- Green font cells link to calculation cells on a different tab (DO NOT CHANGE)
Basic Steps to Completing the Workbook
- Complete ALL blue font cells on Input tab
- Enter project timing and property details
- Fill out budget items by week; click ‘Add Budget Item’ button to add additional budget line items
- Add projected sales price with estimated closing costs in Sale Assumptions section
- Enter financing assumptions
- Complete Sponsor Equity and Investor Equity assumptions
- Use the ‘Purchase Price Finder’ tool to determine the necessary purchase price to hit a target return
- Proceed to Report tab to see project summary
Watch the Video Tutorial
Download The Model
To make this model accessible to everyone, it is offered on a "Pay What You're Able" basis with no minimum (enter $0 if you'd like) or maximum (your support helps keep the content coming - typical real estate models sell for $100 - $300 each). Just enter a price together with an email address to send the download link to, and then click 'Continue'. If you have any questions about our "Pay What You're Able" program or why we offer our models on this basis, please reach out to either Mike or Spencer.
Note (especially for Gmail users): The model is sent via email and occasionally is blocked by spam filters. If you don't see the email arrive within five minutes, check your spam folder.
Excel Pro Forma for Flipping Houses (version 1.11)
- A back-of-the-envelope model for assessing the financial feasibility of a single-family "flip"
- Three worksheets including an 'Inputs' tab, 'Reports' tab, and 'Calculation' tab
- Custom Macros allow the addition of new Budget items, a tool to calculate optimal purchase price based on a target return
- Weekly budget and cash flow forecasting
This Excel file (the "software") is distributed as is, completely without warranty or service support. www.AdventuresinCRE.com and its authors are not liable for the condition or performance of the software. www.AdventuresinCRE.com owns the copyright and grants users a perpetual, irrevocable, worldwide, non-exclusive, royalty-free license with respect to the software as set forth below.
www.AdventuresinCRE.com and its authors hereby disclaim all implied warranties. www.AdventuresinCRE.com grants the users the right to modify, copy, and redistribute the software and documentation, both within the user's organization and externally, subject to the following restrictions:
1. The users agree not to charge others for use of the software, regardless of whether users have altered and/or improved the software in anyway.
2. In any use of the software, the users agree to acknowledge the www.AdventuresinCRE.com authors that developed the software.
3. The users agree to obey all government restrictions governing redistribution or export of the software.
4. The users agree to reproduce any copyright notice which appears on the software and documentation on any copy or modification of such made available to others.
About the Author: Born and raised in the Northwest United States, Spencer Burton has over 15 years of real estate investment and development experience. In his current position, Spencer assesses new acquisition, development, and debt opportunities for a $45bn real estate fund. He resides in Dallas, TX.