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CFP® Developed Software for Analyzing Investment Properties

1. Overview: Bridging the Gap in Rental Property Planning

Dillon Kenniston, CFP®, introduced ReWealth, a purpose-built platform designed to solve a major gap:

Traditional financial planning tools do not adequately analyze rental real estate as an investment asset

Key problem:

• Rental properties are often a large portion of client net worth
• But:
  • Data is fragmented
  • Analysis is shallow
  • Advisors struggle to scale this work 

ReWealth aims to:

• Centralize rental property data
• Automate analysis
• Improve advisor decision-making and client communication 

2. Market Opportunity: A “Hidden” Asset Class

• ~10 million “mom-and-pop” landlords in the U.S.
• ~$7 trillion estimated market value
• Only ~1% of advisors actively specialize in rental real estate 

Key insight:

Rental real estate is not niche—it is underserved at scale

Many clients:

• Inherit property
• Own 1–3 rentals
• Lack clarity on performance 

This creates a major opportunity for advisors who can:

• Quantify returns
• Model decisions
• Integrate real estate into planning 

3. Core Problem Areas Advisors Face

1. Data Fragmentation

• Information spread across:
  • Tax returns
  • Closing documents
  • Public records
• No “custodian-style” aggregation like investment accounts 

2. Perceived Complexity

• Advisors assume deep specialization is required
• In reality:
  • Most decisions require basic but structured analysis 

3. Pricing Challenges

• Hard to price rental analysis due to:
  • Debt
  • Property variability
• Multiple viable pricing models exist:
  • AUM-style
  • Flat fee
  • Per-property 

4. Workflow Friction

• Manual spreadsheets dominate
• Limited integration with planning tools  

4. ReWealth Platform: Key Capabilities

A. Centralized Dashboard

• Firm-level and household-level views
• Metrics include:
  • Portfolio value
  • Cash flow
  • Return on equity
  • Loan-to-value
  • Net operating income (NOI) 

Interactive features:

• Drill down by client or property
• Geographic visualization of holdings 

B. Data Input Methods

1. Manual Entry

• “Fast add” (basic inputs)
• “Full add” (detailed underwriting) 

2. Import from URL

• Zillow: https://www.zillow.com
• Redfin: https://www.redfin.com
• Pulls publicly available property data 

3. Tax Return Import (Key Differentiator)

• Parses:
  • Form 1040
  • Schedule E
  • Form 8582 (passive losses)
  • Depreciation schedules (recommended) 

4. Loan Data Integration

• Upload closing disclosures (HUD statements)
• AI-assisted enrichment for missing loan data 

C. Property-Level Analysis

Each property includes:

• Cash flow analysis
• NOI breakdown
• Loan modeling (including ARM and deferment scenarios)
• Renovation tracking
• Tax basis tracking 

Additional Features

• Unit-level or grouped unit analysis
• CapEx reserves modeling
• Ownership splits (e.g., LLCs, partial ownership) 

5. Advanced Tax & Planning Capabilities

A. Sale Projections

Models:

• Taxable sale
• 1031 exchange 

Outputs include:

• Capital gains
• Depreciation recapture
• Net proceeds comparison 

B. Section 121 Strategy (Primary Residence Conversion)

Case study demonstrated:

• Convert primary residence → rental
• Hold for 2–3 years
• Sell before 3-year limit 

Result:

• Up to ~$340,000 tax-free gain (example)  
• Minimal depreciation recapture (~$7,000) 

C. Cost Segregation Modeling

The software:

• Breaks property into shorter-life components
• Models accelerated depreciation 

Requirements modeled:

• Real estate professional status
• Material participation 

Outputs:

• Tax savings projections
• Wealth impact from reinvestment 

D. Passive vs Active Income Tracking

• Integrates Schedule E logic
• Tracks suspended losses
• Supports complex tax scenarios 

6. Scenario Modeling & Decision Support

A. Renovations

• Tracks:
  • Cost
  • Rent impact
  • Property value increase
• Applies correct tax treatment:
  • Capitalization vs expensing 

B. Financing

• Models:
  • Fixed and variable loans
  • Interest-only periods
  • Cash-out refinances 

C. Opportunity Cost Analysis

• Compare:
  • Holding property
  • Selling and reinvesting
  • Refinancing and redeploying capital 

7. Case Studies (Dan Huffman)

Case Study 1: Primary Residence → Rental Strategy

• Home doubled in value
• Converted to rental generating ~$1,200/month cash flow
• Planned sale within 30–36 months 

Outcome:

• ~$340K tax-efficient proceeds
• Potential mortgage recast → major reduction in expenses 

Case Study 2: Duplex Optimization

• Cash flow: ~$7,600/year
• IRR declining due to appreciation 

Decision:

• Sell property
• Pay ~$12K in taxes
• Reinvest ~$96K into more diversified assets 

Key insight:

Cash flow alone can mask declining returns

Case Study 3: Cash-Out Refinance Strategy

• Paid-off property (~$700K value)
• Low return on equity 

Action:

• Refinance → extract ~$500K
• Invest in higher-return opportunity (~20%) 

Outcome:

• Cash flow increased ~5x
• Property retained for long-term appreciation 

8. Reporting & Client Communication

Report Types

1. Area Analysis

• Data sources:
  • U.S. Census: https://www.census.gov
  • Bureau of Labor Statistics: https://www.bls.gov
  • FBI crime data: https://www.fbi.gov 

Provides:

• Market-level insights
• Economic indicators 

2. Property Analysis

• ~12–13 page report
• Customizable outputs 

3. Household Analysis

• Aggregated portfolio view
• Includes:
  • Cash flow
  • Rent vs market comparison
  • Depreciation tracking 

Key Communication Benefit

Helps advisors shift conversations from:

• “Rent collected” 

To:

“Return on equity, IRR, and tax-adjusted outcomes”

9. Limitations & Integration Gaps

Not Included

• Property management functionality:
  • Tenant communication
  • Maintenance tracking 

Current Integration Status

• No direct integration with:
  • RightCapital: https://www.rightcapital.com
  • eMoney: https://emoneyadvisor.com
  • MoneyGuide: https://www.moneyguide.com  

Workaround:

• Advisors manually transfer net cash flow into planning software 

10. Future Roadmap

Planned enhancements include:

• Identifying underperforming properties
• 1031 exchange optimization workflows
• Integration with DST (Delaware Statutory Trust) solutions
• Improved cross-platform integrations 

Example external resource discussed:

• Exchange Planning Corporation (EPC): https://www.epc1031.com 

11. Key Takeaways for Advisors

1. Rental Real Estate is Underserved

• Large market with limited advisor support 

2. Data is the Bottleneck

• Tax returns are the most reliable starting point 

3. Returns Matter More Than Cash Flow

• IRR and return on equity provide better decision metrics 

4. Tax Strategy is Central

• Section 121
• 1031 exchanges
• Cost segregation 

5. Software Enables Scale

• Moves advisors from:
  • Manual spreadsheets
    → Structured, repeatable analysis 

6. Opportunity for AUM Growth

• Better analysis can lead clients to:
  • Reallocate capital
  • Diversify beyond real estate 

Bottom Line

ReWealth demonstrates a broader shift in financial planning:

Rental real estate is evolving from a “side asset” into a fully modeled, tax-optimized component of comprehensive financial planning.

Advisors who can quantify and communicate:

• Cash flow
• Tax impact
• Opportunity cost 

will be positioned to deliver significantly more value—and potentially capture more client assets in the process.