The Real Estate Financial Planner Blueprint™
17 Nomad™ to Short-Term Rental - 50% Higher Rents
Accounts
This Scenario is made up of 2
Accounts. Let's look at each one in more detail.
Account
By the way, we assume that all dates in our
Scenarios are for the first of the month. This significantly simplifies the math and does not significantly impact the results of the modeling.
The Special
Account
The Account is a special type of
Account for us for a couple of reasons.
First, it is the only Account that is required to be present in every
Scenario. We require it because it is the special
Account we go to when there is not enough money in another
Account to withdraw money.
For example, if the Scenario ends up having negative cash flow on a
Property and there is not enough money in the
Account that we would normally be depositing and withdrawing the income and expenses of that
Property to, where do we get the money from to handle that negative cash? In that case, we'd take as much as we could from the
Account that was supposed to be handling the income and expenses of the
Property and then any deficit would be taken from this special
Account.
Because the Account is the go-to
Account when we have a shortage of money, it is also the only
Account that can have a negative balance.
You can think of it as a way of keeping track of how much extra money from outside the model that you would need to add to the Scenario and when.
Cash flow is important to the success of your investing endeavors and we have several classes to help you maximize it on every property you own.
Cash Flow Explosion Class Recording https://RealEstateFinancialPlanner.com/cash-flow-explosion-2016-edition/
Buying Down Interest Rates Class Recording https://RealEstateFinancialPlanner.com/buying-down-interest-rates-2020-edition/
Another interesting fact about the special Account is that it does not earn any interest. The return on it is always 0% because it is intended to be looked at as a special
Account that only stores cash.
Some folks may choose to just use the default Account when running their own
Scenarios to simplify their modeling and see how much money they'll need to implement a specific strategy. However, if you want your excess cash to be earning a return like you would in a typical savings or investment
Account, you would want to use an
Account other than the
Account since the
Account can never earn a return on money in that
Account.
All-In-One Account Earning 7%/year Account
We start tracking the Account we call the
All-In-One Account Earning 7%/year Account at the very start of the
Scenario, which we assume to be
Jun 2024. We assume that it had an initial balance of $12,516.59.
For this Account, we assume that you're earning a rate of return on any money in that
Account of 7% per year.
How The Real Estate Financial Planner™ Software Calculates Returns
The Real Estate Financial Planner™ software calculates your return on investment monthly even though the returns are typically stated as a yearly return. So, each month, based on the amount that is in the Account that month, The Real Estate Financial Planner™ software will calculate what the return was for that month only.
It is also important to note that we're not just dividing the return by 12 to get the month return. Instead we are calculating what return you'd need to get monthly such that if it were compounding, it would be the yearly return. In other words, for this Account it would not be 7% ÷ 12 months which is 0.58333% per month. Instead, it would be 0.56541% per month.
This is similar to how we calculate other compounding returns in The Real Estate Financial Planner™ software as well like appreciation and rent appreciation when dealing with Properties.
Buy Property When Account Has Down Payment
We will explain the Rules in more detail in a moment, however, I would like to show you which
Rules do apply to this
Account and give you some very basic information about what each
Rule does.
This Rule for this
Account runs for the entire
Scenario.
With the Buy Property When Account Has Down Payment, we buy a version of the Typical Green Bay, Wisconsin Nomad™ Property to Short-Term Rental with 50% Higher Rents and Double Maintenace Property when the
All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the
Property.
Since the Typical Green Bay, Wisconsin Nomad™ Property to Short-Term Rental with 50% Higher Rents and Double Maintenace Property is really a template of a
Property (what we call a Dynamic
Property) we could buy multiple copies of it. We do limit the number that we can buy using this
Rule to 10 total.
Paycheck and Personal Expenses
This Rule for this
Account runs for the entire
Scenario.
With the Paycheck and Personal Expenses, we collect a paycheck and pay our personal living expenses out of the All-In-One Account Earning 7%/year Account each month. We start out collecting $5,000 Inflation Adjusted from our paycheck and paying out $3,000 Inflation Adjusted in personal expenses each month. Both our paycheck and personal expenses increase with inflation over time. We do pay taxes on the amount we collect from our paycheck at a rate of 20%.
Summary of
Accounts
These are the Accounts that we have in this
Scenario.
![]() |
Date Opened | Opening Balance |
---|---|---|
Default Cash Account | ![]() |
$0 |
All-In-One Account Earning 7%/year | ![]() |
$12,516.59 |
Total for ![]() |
$12,516.59 |
Based on the Accounts that we have when we start this
Scenario, it looks like we have a total starting balance in all the
Accounts of $12,516.59.
Next, let's take a look at the Properties that we have in this
Scenario.
![](https://realestatefinancialplanner.com/wp-content/uploads/scenario.png)
Blueprint™ Menu of Sections
- Introduction
Accounts
Properties
Rules
Significant Events
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Achieved Financial Independence Goal
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Achieved Ideal Financial Independence Goal
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
Achieved 2 X Ideal Financial Independence Goal
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Paid Off Mortgage
Final Month Summary
Reports