RealVest Real Estate MCP Server

/** * Subject-To Deal Calculator * Analyzes subject-to real estate deals where buyer takes over existing mortgage payments */ export class SubjectToDealCalculator { getSchema() { return { type: 'object', properties: { property_details: { type: 'object', properties: { address: { type: 'string', description: 'Property address' }, property_type: { type: 'string', enum: ['single_family', 'multi_family', 'condo', 'townhouse'], description: 'Type of property' }, square_footage: { type: 'number', minimum: 0, description: 'Total square footage' }, bedrooms: { type: 'number', minimum: 0, description: 'Number of bedrooms' }, bathrooms: { type: 'number', minimum: 0, description: 'Number of bathrooms' }, year_built: { type: 'number', minimum: 1800, description: 'Year property was built' }, condition: { type: 'string', enum: ['excellent', 'good', 'fair', 'poor'], description: 'Current condition of property' }, current_market_value: { type: 'number', minimum: 0, description: 'Current market value' } }, required: ['property_type', 'current_market_value'] }, existing_mortgage: { type: 'object', properties: { original_loan_amount: { type: 'number', minimum: 0, description: 'Original loan amount' }, current_balance: { type: 'number', minimum: 0, description: 'Current mortgage balance' }, monthly_payment: { type: 'number', minimum: 0, description: 'Monthly PITI payment' }, interest_rate: { type: 'number', minimum: 0, maximum: 30, description: 'Interest rate (%)' }, remaining_term_months: { type: 'number', minimum: 1, description: 'Remaining term in months' }, loan_type: { type: 'string', enum: ['conventional', 'fha', 'va', 'usda', 'portfolio'], description: 'Type of existing loan' }, pmi_monthly: { type: 'number', minimum: 0, description: 'Monthly PMI payment' }, property_taxes_monthly: { type: 'number', minimum: 0, description: 'Monthly property taxes' }, insurance_monthly: { type: 'number', minimum: 0, description: 'Monthly insurance' }, hoa_monthly: { type: 'number', minimum: 0, description: 'Monthly HOA fees' } }, required: ['current_balance', 'monthly_payment', 'interest_rate', 'remaining_term_months'] }, seller_situation: { type: 'object', properties: { reason_for_selling: { type: 'string', enum: ['foreclosure_threat', 'job_relocation', 'financial_hardship', 'inherited_property', 'divorce', 'health_issues', 'other'], description: 'Seller\'s primary reason for selling' }, months_behind: { type: 'number', minimum: 0, description: 'Months behind on payments' }, arrears_amount: { type: 'number', minimum: 0, description: 'Total amount in arrears' }, foreclosure_date: { type: 'string', description: 'Scheduled foreclosure date if applicable' }, seller_equity: { type: 'number', description: 'Seller\'s equity in property (can be negative)' }, seller_motivation_level: { type: 'string', enum: ['extremely_high', 'very_high', 'high', 'moderate'], description: 'Level of seller motivation' } }, required: ['reason_for_selling', 'seller_motivation_level'] }, deal_structure: { type: 'object', properties: { purchase_price: { type: 'number', minimum: 0, description: 'Agreed purchase price' }, cash_to_seller: { type: 'number', minimum: 0, description: 'Cash payment to seller' }, closing_costs: { type: 'number', minimum: 0, description: 'Estimated closing costs' }, repair_costs: { type: 'number', minimum: 0, description: 'Estimated repair costs' }, deed_transfer_method: { type: 'string', enum: ['warranty_deed', 'quitclaim_deed', 'land_contract', 'lease_option'], description: 'Method of deed transfer' }, authorization_agreements: { type: 'boolean', description: 'Whether authorization to pay agreements are in place' } }, required: ['purchase_price', 'cash_to_seller', 'deed_transfer_method'] }, rental_analysis: { type: 'object', properties: { estimated_monthly_rent: { type: 'number', minimum: 0, description: 'Estimated monthly rental income' }, vacancy_rate: { type: 'number', minimum: 0, maximum: 100, description: 'Expected vacancy rate (%)' }, property_management_rate: { type: 'number', minimum: 0, maximum: 50, description: 'Property management fee (%)' }, maintenance_reserves: { type: 'number', minimum: 0, description: 'Monthly maintenance reserves' }, tenant_placement_fee: { type: 'number', minimum: 0, description: 'Tenant placement fee' } }, required: ['estimated_monthly_rent'] }, analysis_options: { type: 'object', properties: { include_legal_risks: { type: 'boolean', description: 'Include legal risk analysis' }, calculate_exit_strategies: { type: 'boolean', description: 'Calculate exit strategy options' }, insurance_analysis: { type: 'boolean', description: 'Analyze insurance requirements' }, long_term_projections: { type: 'boolean', description: 'Include 5-year projections' } } } }, required: ['property_details', 'existing_mortgage', 'seller_situation', 'deal_structure', 'rental_analysis'] }; } calculate(params) { const { property_details, existing_mortgage, seller_situation, deal_structure, rental_analysis, analysis_options = {} } = params; // Calculate deal metrics const deal_metrics = this.calculateDealMetrics( property_details, existing_mortgage, deal_structure ); // Analyze cash flow const cash_flow_analysis = this.analyzeCashFlow( existing_mortgage, rental_analysis, deal_structure ); // Calculate equity and appreciation const equity_analysis = this.analyzeEquity( property_details, existing_mortgage, deal_structure ); // Risk assessment const risk_analysis = analysis_options.include_legal_risks ? this.assessRisks( existing_mortgage, seller_situation, deal_structure, property_details ) : null; // Exit strategies const exit_strategies = analysis_options.calculate_exit_strategies ? this.calculateExitStrategies( property_details, existing_mortgage, deal_structure, cash_flow_analysis ) : null; // Insurance analysis const insurance_analysis = analysis_options.insurance_analysis ? this.analyzeInsuranceRequirements( property_details, existing_mortgage, deal_structure ) : null; // Long-term projections const projections = analysis_options.long_term_projections ? this.calculateLongTermProjections( property_details, existing_mortgage, cash_flow_analysis, equity_analysis ) : null; return { deal_summary: this.createDealSummary( property_details, deal_structure, seller_situation ), deal_metrics, cash_flow_analysis, equity_analysis, risk_assessment: risk_analysis, exit_strategies, insurance_requirements: insurance_analysis, long_term_projections: projections, recommendations: this.generateRecommendations( deal_metrics, cash_flow_analysis, risk_analysis, existing_mortgage, seller_situation ) }; } createDealSummary(property_details, deal_structure, seller_situation) { return { property_type: property_details.property_type, current_market_value: property_details.current_market_value, purchase_price: deal_structure.purchase_price, cash_required: deal_structure.cash_to_seller + (deal_structure.closing_costs || 0) + (deal_structure.repair_costs || 0), seller_motivation: seller_situation.seller_motivation_level, deal_type: 'Subject-To Acquisition', transfer_method: deal_structure.deed_transfer_method }; } calculateDealMetrics(property_details, existing_mortgage, deal_structure) { const market_value = property_details.current_market_value; const purchase_price = deal_structure.purchase_price; const mortgage_balance = existing_mortgage.current_balance; const cash_to_seller = deal_structure.cash_to_seller; const closing_costs = deal_structure.closing_costs || 0; const repair_costs = deal_structure.repair_costs || 0; // Total cash invested const total_cash_invested = cash_to_seller + closing_costs + repair_costs; // Instant equity calculation const instant_equity = market_value - mortgage_balance - total_cash_invested; // Equity percentage const equity_percentage = (instant_equity / market_value) * 100; // Loan-to-value ratio const ltv_ratio = (mortgage_balance / market_value) * 100; // Deal efficiency metrics const acquisition_discount = market_value - purchase_price; const discount_percentage = (acquisition_discount / market_value) * 100; // Leverage analysis const effective_leverage = mortgage_balance / (total_cash_invested || 1); return { market_value, purchase_price, mortgage_balance, total_cash_invested, instant_equity, equity_percentage, ltv_ratio, acquisition_discount, discount_percentage, effective_leverage, deal_quality_score: this.calculateDealQualityScore( discount_percentage, equity_percentage, ltv_ratio, effective_leverage ) }; } analyzeCashFlow(existing_mortgage, rental_analysis, deal_structure) { const monthly_payment = existing_mortgage.monthly_payment; const gross_rent = rental_analysis.estimated_monthly_rent; const vacancy_rate = (rental_analysis.vacancy_rate || 5) / 100; const management_rate = (rental_analysis.property_management_rate || 0) / 100; const maintenance_reserves = rental_analysis.maintenance_reserves || gross_rent * 0.05; // Effective rental income const effective_rent = gross_rent * (1 - vacancy_rate); // Management fees const management_fee = effective_rent * management_rate; // Total monthly expenses const total_expenses = monthly_payment + management_fee + maintenance_reserves; // Net cash flow const net_cash_flow = effective_rent - total_expenses; // Cash-on-cash return const cash_invested = deal_structure.cash_to_seller + (deal_structure.closing_costs || 0) + (deal_structure.repair_costs || 0); const annual_cash_flow = net_cash_flow * 12; const cash_on_cash_return = cash_invested > 0 ? (annual_cash_flow / cash_invested) * 100 : null; // Cash flow coverage ratio const cash_flow_coverage = effective_rent / monthly_payment; return { gross_monthly_rent: gross_rent, effective_monthly_rent: effective_rent, monthly_expenses: { mortgage_payment: monthly_payment, management_fee, maintenance_reserves, total: total_expenses }, net_monthly_cash_flow: net_cash_flow, annual_cash_flow, cash_on_cash_return, cash_flow_coverage_ratio: cash_flow_coverage, cash_flow_rating: this.rateCashFlow(net_cash_flow, cash_flow_coverage, cash_on_cash_return) }; } analyzeEquity(property_details, existing_mortgage, deal_structure) { const market_value = property_details.current_market_value; const mortgage_balance = existing_mortgage.current_balance; const monthly_payment = existing_mortgage.monthly_payment; const interest_rate = existing_mortgage.interest_rate / 100 / 12; const remaining_months = existing_mortgage.remaining_term_months; // Current equity position const current_equity = market_value - mortgage_balance; const current_ltv = (mortgage_balance / market_value) * 100; // Calculate monthly principal payment const monthly_principal = this.calculateMonthlyPrincipal( mortgage_balance, interest_rate, remaining_months, monthly_payment ); // Annual principal paydown const annual_principal_paydown = monthly_principal * 12; // Equity build-up over time (assuming 3% appreciation) const annual_appreciation_rate = 0.03; const annual_appreciation = market_value * annual_appreciation_rate; // Total annual equity gain const total_annual_equity_gain = annual_principal_paydown + annual_appreciation; // 5-year equity projection const five_year_projections = this.projectEquityGrowth( market_value, mortgage_balance, monthly_principal, annual_appreciation_rate, 60 // 5 years ); return { current_equity, current_ltv, monthly_principal_paydown: monthly_principal, annual_principal_paydown, annual_appreciation, total_annual_equity_gain, equity_growth_rate: (total_annual_equity_gain / current_equity) * 100, five_year_projections, equity_multiple: five_year_projections.final_equity / current_equity }; } assessRisks(existing_mortgage, seller_situation, deal_structure, property_details) { const risks = []; let risk_score = 0; // Due-on-sale clause risk if (existing_mortgage.loan_type === 'conventional' || existing_mortgage.loan_type === 'portfolio') { risks.push({ category: 'Legal Risk', level: 'High', description: 'Due-on-sale clause may trigger loan acceleration', impact: 'Lender could demand immediate full payment', mitigation: 'Use authorization agreements and avoid triggering events' }); risk_score += 4; } else if (existing_mortgage.loan_type === 'fha' || existing_mortgage.loan_type === 'va') { risks.push({ category: 'Legal Risk', level: 'Medium', description: 'Government loans have due-on-sale clauses but less enforcement', impact: 'Lower probability of acceleration', mitigation: 'Maintain payment history and low profile' }); risk_score += 2; } // Title and insurance risks if (!deal_structure.authorization_agreements) { risks.push({ category: 'Insurance Risk', level: 'High', description: 'No authorization agreements increase insurance complications', impact: 'Difficulty obtaining adequate insurance coverage', mitigation: 'Obtain seller authorization and power of attorney' }); risk_score += 3; } // Seller default risk if (seller_situation.months_behind > 0) { const risk_level = seller_situation.months_behind >= 3 ? 'High' : 'Medium'; risks.push({ category: 'Payment Risk', level: risk_level, description: `Seller is ${seller_situation.months_behind} months behind on payments`, impact: 'May need to cure arrears to prevent foreclosure', mitigation: 'Bring loan current as part of acquisition' }); risk_score += seller_situation.months_behind >= 3 ? 3 : 2; } // Market risk const ltv = (existing_mortgage.current_balance / property_details.current_market_value) * 100; if (ltv > 90) { risks.push({ category: 'Market Risk', level: 'High', description: 'High LTV leaves little equity cushion', impact: 'Vulnerable to market downturns', mitigation: 'Ensure strong cash flow to weather market changes' }); risk_score += 3; } else if (ltv > 80) { risks.push({ category: 'Market Risk', level: 'Medium', description: 'Moderate LTV with limited equity buffer', impact: 'Some vulnerability to market fluctuations', mitigation: 'Monitor market conditions closely' }); risk_score += 2; } // Interest rate risk if (existing_mortgage.interest_rate > 7) { risks.push({ category: 'Interest Rate Risk', level: 'Medium', description: 'High interest rate affects cash flow', impact: 'Reduced profitability compared to current rates', mitigation: 'Consider refinance opportunities in future' }); risk_score += 2; } // Seller motivation risk if (seller_situation.seller_motivation_level === 'moderate') { risks.push({ category: 'Deal Risk', level: 'Medium', description: 'Moderate seller motivation may lead to deal complications', impact: 'Seller may change terms or find alternative solutions', mitigation: 'Structure deal to benefit seller significantly' }); risk_score += 2; } const overall_risk_level = risk_score >= 10 ? 'Very High' : risk_score >= 7 ? 'High' : risk_score >= 4 ? 'Medium' : 'Low'; return { identified_risks: risks, risk_score, overall_risk_level, legal_compliance_score: this.calculateLegalComplianceScore(deal_structure, existing_mortgage), risk_mitigation_strategies: this.getRiskMitigationStrategies(risks) }; } calculateExitStrategies(property_details, existing_mortgage, deal_structure, cash_flow_analysis) { const market_value = property_details.current_market_value; const mortgage_balance = existing_mortgage.current_balance; const total_invested = deal_structure.cash_to_seller + (deal_structure.closing_costs || 0) + (deal_structure.repair_costs || 0); const strategies = []; // Strategy 1: Hold and rent (current analysis) strategies.push({ strategy: 'Hold and Rent', description: 'Continue making payments and collect rental income', timeline: 'Long-term (5+ years)', cash_flow: cash_flow_analysis.net_monthly_cash_flow, total_return_5_year: this.calculateHoldReturn(market_value, mortgage_balance, cash_flow_analysis, 60), pros: ['Passive income', 'Equity build-up', 'Tax benefits'], cons: ['Due-on-sale risk', 'Property management', 'Market risk'], exit_requirements: 'None - continue current structure' }); // Strategy 2: Refinance and legitimize const refinance_amount = mortgage_balance * 1.05; // Assume 5% closing costs const new_payment = this.calculateMonthlyPayment(refinance_amount, 0.07, 360); // 7% 30-year const refinance_cash_flow = cash_flow_analysis.gross_monthly_rent * 0.95 - new_payment - cash_flow_analysis.monthly_expenses.maintenance_reserves; strategies.push({ strategy: 'Refinance', description: 'Obtain new loan in your name to pay off existing mortgage', timeline: '3-6 months', cash_flow: refinance_cash_flow, total_return_5_year: this.calculateHoldReturn(market_value, refinance_amount, { net_monthly_cash_flow: refinance_cash_flow }, 60), pros: ['Eliminates due-on-sale risk', 'Clean title', 'Better insurance options'], cons: ['Qualification requirements', 'Closing costs', 'Higher payment possible'], exit_requirements: 'Income verification, credit approval, appraisal' }); // Strategy 3: Sell with seller financing const seller_finance_price = market_value * 0.95; // 5% discount for seller financing const seller_finance_profit = seller_finance_price - mortgage_balance - total_invested; strategies.push({ strategy: 'Sell with Owner Financing', description: 'Sell property with owner financing to another investor', timeline: '6-12 months', cash_flow: 0, // One-time profit total_return_5_year: seller_finance_profit, pros: ['Quick exit', 'Good profit potential', 'Monthly income stream'], cons: ['Buyer default risk', 'Property management', 'Market timing'], exit_requirements: 'Find qualified buyer, due-on-sale risk remains' }); // Strategy 4: Quick sale const quick_sale_price = market_value * 0.85; // 15% discount for quick sale const quick_sale_profit = quick_sale_price - mortgage_balance - total_invested; strategies.push({ strategy: 'Quick Sale', description: 'Sell property quickly to cash buyer', timeline: '1-3 months', cash_flow: 0, total_return_5_year: quick_sale_profit, pros: ['Fast exit', 'No ongoing risk', 'Immediate liquidity'], cons: ['Below market price', 'Limited profit', 'Lost appreciation potential'], exit_requirements: 'Find cash buyer, clear title issues' }); return { available_strategies: strategies, recommended_strategy: this.recommendBestExitStrategy(strategies, cash_flow_analysis), strategy_comparison: this.compareExitStrategies(strategies) }; } analyzeInsuranceRequirements(property_details, existing_mortgage, deal_structure) { const challenges = []; const solutions = []; // Standard homeowner's insurance challenges if (deal_structure.deed_transfer_method === 'quitclaim_deed') { challenges.push('Quitclaim deed may complicate insurance claims'); solutions.push('Obtain title insurance and clear chain of title'); } // Lender requirements if (existing_mortgage.loan_type === 'conventional') { challenges.push('Lender-required insurance may be difficult to maintain'); solutions.push('Use power of attorney to manage insurance directly'); } // Liability concerns challenges.push('Personal liability exposure from property ownership'); solutions.push('Form LLC or corporation for property ownership'); return { insurance_challenges: challenges, recommended_solutions: solutions, required_coverage: { property_insurance: existing_mortgage.insurance_monthly * 12, liability_insurance: 1200, // Estimated $100/month title_insurance: property_details.current_market_value * 0.005, // One-time 0.5% total_annual_cost: (existing_mortgage.insurance_monthly * 12) + 1200 }, recommended_structure: 'LLC ownership with comprehensive insurance package' }; } calculateLongTermProjections(property_details, existing_mortgage, cash_flow_analysis, equity_analysis) { const years = [1, 2, 3, 4, 5]; const projections = []; years.forEach(year => { const months = year * 12; const annual_cash_flow = cash_flow_analysis.net_monthly_cash_flow * 12; const cumulative_cash_flow = annual_cash_flow * year; // Mortgage balance projection const remaining_balance = this.calculateRemainingBalance( existing_mortgage.current_balance, existing_mortgage.interest_rate / 100 / 12, existing_mortgage.remaining_term_months, months ); // Property value projection (3% annual appreciation) const projected_value = property_details.current_market_value * Math.pow(1.03, year); const projected_equity = projected_value - remaining_balance; // Total return calculation const total_return = cumulative_cash_flow + projected_equity; const initial_investment = equity_analysis.current_equity || 1; const total_roi = ((total_return - initial_investment) / initial_investment) * 100; projections.push({ year, projected_property_value: projected_value, remaining_mortgage_balance: remaining_balance, projected_equity, cumulative_cash_flow, total_return, annualized_roi: total_roi / year }); }); return { yearly_projections: projections, five_year_summary: { total_cash_flow: projections[4].cumulative_cash_flow, equity_appreciation: projections[4].projected_equity - equity_analysis.current_equity, total_return: projections[4].total_return, average_annual_roi: projections[4].annualized_roi } }; } // Helper methods calculateDealQualityScore(discount_percentage, equity_percentage, ltv_ratio, effective_leverage) { let score = 0; // Discount scoring if (discount_percentage >= 20) score += 25; else if (discount_percentage >= 10) score += 15; else if (discount_percentage >= 5) score += 10; // Equity scoring if (equity_percentage >= 30) score += 25; else if (equity_percentage >= 20) score += 20; else if (equity_percentage >= 10) score += 15; else if (equity_percentage >= 0) score += 10; // LTV scoring (lower is better) if (ltv_ratio <= 70) score += 25; else if (ltv_ratio <= 80) score += 20; else if (ltv_ratio <= 90) score += 15; else if (ltv_ratio <= 95) score += 10; // Leverage scoring if (effective_leverage >= 10) score += 25; else if (effective_leverage >= 5) score += 20; else if (effective_leverage >= 3) score += 15; else if (effective_leverage >= 2) score += 10; return Math.min(100, score); } calculateMonthlyPrincipal(balance, monthly_rate, remaining_months, monthly_payment) { const interest_payment = balance * monthly_rate; return monthly_payment - interest_payment; } projectEquityGrowth(initial_value, initial_balance, monthly_principal, appreciation_rate, months) { let property_value = initial_value; let mortgage_balance = initial_balance; for (let i = 0; i < months; i++) { // Monthly appreciation property_value *= (1 + appreciation_rate / 12); // Principal paydown mortgage_balance -= monthly_principal; } return { final_property_value: property_value, final_mortgage_balance: Math.max(0, mortgage_balance), final_equity: property_value - Math.max(0, mortgage_balance), total_appreciation: property_value - initial_value, total_principal_paydown: initial_balance - Math.max(0, mortgage_balance) }; } rateCashFlow(net_cash_flow, coverage_ratio, cash_on_cash_return) { let score = 0; if (net_cash_flow >= 500) score += 3; else if (net_cash_flow >= 200) score += 2; else if (net_cash_flow >= 0) score += 1; if (coverage_ratio >= 1.5) score += 3; else if (coverage_ratio >= 1.25) score += 2; else if (coverage_ratio >= 1.1) score += 1; if (cash_on_cash_return >= 15) score += 3; else if (cash_on_cash_return >= 10) score += 2; else if (cash_on_cash_return >= 5) score += 1; if (score >= 8) return 'Excellent'; if (score >= 6) return 'Very Good'; if (score >= 4) return 'Good'; if (score >= 2) return 'Fair'; return 'Poor'; } calculateLegalComplianceScore(deal_structure, existing_mortgage) { let score = 100; // Deduct points for risk factors if (deal_structure.deed_transfer_method === 'quitclaim_deed') { score -= 20; // Higher risk transfer method } else if (deal_structure.deed_transfer_method === 'warranty_deed') { score -= 10; // Still some risk but better } if (!deal_structure.authorization_agreements) { score -= 30; // Major compliance issue } if (existing_mortgage.loan_type === 'conventional') { score -= 25; // Highest due-on-sale risk } else if (existing_mortgage.loan_type === 'fha' || existing_mortgage.loan_type === 'va') { score -= 15; // Moderate risk } return Math.max(0, score); } getRiskMitigationStrategies(risks) { const strategies = new Set(); risks.forEach(risk => { switch (risk.category) { case 'Legal Risk': strategies.add('Obtain comprehensive title insurance'); strategies.add('Use authorization agreements and power of attorney'); strategies.add('Structure through LLC for liability protection'); strategies.add('Maintain low profile to avoid triggering due-on-sale'); break; case 'Insurance Risk': strategies.add('Secure adequate property and liability insurance'); strategies.add('Consider umbrella insurance policy'); strategies.add('Work with insurance broker familiar with subject-to deals'); break; case 'Payment Risk': strategies.add('Bring loan current before closing'); strategies.add('Set up automatic payment systems'); strategies.add('Maintain 6-month payment reserves'); break; case 'Market Risk': strategies.add('Ensure strong cash flow to weather downturns'); strategies.add('Consider refinance if rates drop significantly'); strategies.add('Monitor local market conditions closely'); break; case 'Interest Rate Risk': strategies.add('Plan for future refinance opportunities'); strategies.add('Structure deal to handle higher payments'); break; case 'Deal Risk': strategies.add('Ensure win-win structure for seller'); strategies.add('Provide ongoing communication and support'); strategies.add('Have backup plans ready'); break; } }); return Array.from(strategies); } calculateHoldReturn(market_value, mortgage_balance, cash_flow_analysis, months) { const annual_cash_flow = cash_flow_analysis.net_monthly_cash_flow * 12; const years = months / 12; const total_cash_flow = annual_cash_flow * years; // Assume 3% appreciation and principal paydown const future_value = market_value * Math.pow(1.03, years); const principal_paydown = mortgage_balance * 0.05 * years; // Rough estimate const future_equity = future_value - (mortgage_balance - principal_paydown); return total_cash_flow + future_equity; } calculateMonthlyPayment(principal, annual_rate, months) { const monthly_rate = annual_rate / 12; return principal * (monthly_rate * Math.pow(1 + monthly_rate, months)) / (Math.pow(1 + monthly_rate, months) - 1); } calculateRemainingBalance(balance, monthly_rate, total_months, payments_made) { const monthly_payment = this.calculateMonthlyPayment(balance, monthly_rate * 12, total_months); for (let i = 0; i < payments_made; i++) { const interest = balance * monthly_rate; const principal = monthly_payment - interest; balance -= principal; } return Math.max(0, balance); } recommendBestExitStrategy(strategies, cash_flow_analysis) { // Score strategies based on return, risk, and timeline const scored_strategies = strategies.map(strategy => { let score = 0; // Return scoring if (strategy.total_return_5_year >= 100000) score += 4; else if (strategy.total_return_5_year >= 50000) score += 3; else if (strategy.total_return_5_year >= 25000) score += 2; else if (strategy.total_return_5_year >= 0) score += 1; // Cash flow scoring if (strategy.cash_flow >= 500) score += 3; else if (strategy.cash_flow >= 200) score += 2; else if (strategy.cash_flow >= 0) score += 1; // Timeline preference (shorter gets bonus for flexibility) if (strategy.timeline.includes('1-3 months')) score += 2; else if (strategy.timeline.includes('3-6 months')) score += 1; return { ...strategy, score }; }); const best_strategy = scored_strategies.reduce((best, current) => current.score > best.score ? current : best ); return { recommended: best_strategy.strategy, reasoning: `Best balance of returns (${best_strategy.total_return_5_year}), cash flow (${best_strategy.cash_flow}/month), and risk management` }; } compareExitStrategies(strategies) { return { highest_return: strategies.reduce((max, current) => current.total_return_5_year > max.total_return_5_year ? current : max ), best_cash_flow: strategies.reduce((max, current) => current.cash_flow > max.cash_flow ? current : max ), fastest_exit: strategies.find(s => s.timeline.includes('1-3 months')) || strategies[0] }; } generateRecommendations(deal_metrics, cash_flow_analysis, risk_analysis, existing_mortgage, seller_situation) { const recommendations = []; // Deal quality recommendations if (deal_metrics.deal_quality_score >= 80) { recommendations.push({ category: 'Deal Quality', priority: 'High', recommendation: `Excellent deal score (${deal_metrics.deal_quality_score}/100) - proceed with confidence`, action: 'Move quickly to secure deal before seller finds alternatives' }); } else if (deal_metrics.deal_quality_score < 50) { recommendations.push({ category: 'Deal Quality', priority: 'High', recommendation: `Low deal score (${deal_metrics.deal_quality_score}/100) indicates significant challenges`, action: 'Renegotiate terms or consider passing on deal' }); } // Cash flow recommendations if (cash_flow_analysis.net_monthly_cash_flow < 0) { recommendations.push({ category: 'Cash Flow', priority: 'High', recommendation: 'Negative cash flow requires additional capital', action: 'Increase rent, reduce expenses, or provide seller with less cash' }); } else if (cash_flow_analysis.cash_flow_coverage_ratio < 1.2) { recommendations.push({ category: 'Cash Flow', priority: 'Medium', recommendation: 'Low coverage ratio increases payment risk', action: 'Build larger cash reserves or improve rental income' }); } // Risk management recommendations if (risk_analysis && risk_analysis.overall_risk_level === 'Very High') { recommendations.push({ category: 'Risk Management', priority: 'High', recommendation: 'Very high risk level requires extensive mitigation', action: 'Implement all recommended risk mitigation strategies' }); } // Legal compliance recommendations if (risk_analysis && risk_analysis.legal_compliance_score < 70) { recommendations.push({ category: 'Legal Compliance', priority: 'High', recommendation: 'Low compliance score increases legal exposure', action: 'Consult with real estate attorney and improve deal structure' }); } // Seller situation recommendations if (seller_situation.months_behind > 0) { recommendations.push({ category: 'Seller Assistance', priority: 'High', recommendation: `Seller is ${seller_situation.months_behind} months behind - foreclosure risk`, action: 'Include arrears amount in deal structure to bring loan current' }); } // Market conditions recommendations if (deal_metrics.ltv_ratio > 90) { recommendations.push({ category: 'Market Risk', priority: 'Medium', recommendation: 'High LTV creates vulnerability to market downturns', action: 'Ensure strong cash flow and consider market timing' }); } return recommendations; } }