The Real Estate Financial Planner Blueprint™
$1MM - 4% Inflation - Buy 20% DP Properties
Summary At The End of Month 1
Let's summarize what your position looks like at the end of Month 1 (our last
Properties Owned
Since this is the first month, here is a very simple chart showing the number of Properties we own.
Yes, I did just show you a chart showing that you own a single Property at this point.
Net Worth
At the end of Month 1, your overall net worth for the entire Scenario up to this point in time can be summarized by the following chart.
Account Balances
If we sum up the Account balances for all the Accounts each month we can see the total balance for each month up through this month, Month 1. Our total Account balance this month is $918,339.26 This is after all the income and expenses for the month.
The following chart shows how the total Account balance of $918,339.26 for all your Accounts is distributed over your 2 Accounts in Month 1.
Total Equity
We can look at equity in one of three ways:
- Total Equity
- Cash Out Refinance Equity
- Sell With Real Estate Agent Equity
With total equity we are just looking at the difference between the Property value and the mortgage balance. In Month 1, we have $77,244.02 in total equity. The following is a chart showing the total equity of Properties in this Scenario.
With cash out refinance equity, we are assuming that your equity is defined as the amount of equity you could access if you did cash out refinances on all your Properties and were limited to being able to cash out refinance up to 75% loan-to-value. In Month 1, we have $0 in accessible total cash out refinance equity. For any Properties where we do not have enough equity to a do a cash out refinance and receive cash from the refi, we just won't refinance.
With sell-with-agent equity, we are assuming that you can access your equity by selling the property with a real estate agent. Furthermore, we assume that there is a cost to accessing this equity since you'll likely need to pay the real estate agent that represents you and the real estate agent that brings the buyer a commission. In addition to commissions, we also assume that you are paying 1% of the sale price in fees to sell with a real estate agent. That means that between the real estate commission (which we have estimated to be 6% between the two real estate agents) and the 1% in closing costs, that you really only net 93% of the sale price minus whatever your loan balance is. In Month 1, we have $50,556.94 in total accessible sell with real estate agent equity. If you owe more than 93% of the sale price on a Property, we are not considering that Property for a sale with a real estate agent.
Learn more about equity and return on equity and return on investment by watching this special class on different ways to calculate returns below.
Return on Investment and Return on Equity Class Recording
https://RealEstateFinancialPlanner.com/return-on-investment-and-return-on-equity/
Cash Flow
Your total cash flow for all Properties combined (excluding any Properties you are currently living in and not collecting rent on) is $1,603.02 per month in Month 1. This does include an estimate of cash flow from the tax benefit of depreciation. You can see a summary chart of this below.
Minimum Gross Income Required
The Real Estate Financial Planner™ software does calculations to determine what it believes you would need to be earning in gross income from all sources between you and your spouse (if you're buying together on the loan) to be able to qualify for the loans on Properties.
The software assumes you have no other debt besides your mortgages. If you have car debt, student loan debt, credit card debt or any other debts at all, it will increase this number. While it is not 100% accurate, a rule of thumb to estimate how much more you'll need to earn if you have additional debts is to double the monthly payment. For example, if your car payment is $300 per month, you'd need to add about $600 more per month in income to still be able to qualify carrying that additional debt.
Of course, this calculation is really an estimate and you should discuss the actual requirement with your lender for your specific situation.
The following chart shows you the estimated minimum gross monthly income required to be able to qualify for the current loans you have in the Scenario. For Month 1, you will need to be earning, at a minimum, $0 per month gross (before taxes) between you and your spouse.
Your income from your rental Properties can count toward this as well.
Purchased 20% DP - 4% Inflation 2 Property
Bought in Month 2
We have a Rule that has you buying the 20% DP - 4% Inflation 2 Property when your Account balance in the $1MM in Stocks @ 7%/yr Account reaches $40,000 (which we adjust for inflation to be worth $40,130.95 in Month 2). The following is a chart showing the balance of $1MM in Stocks @ 7%/yr Account from the start of the Scenario to Month 2 after we've adjusted for all the income and expenses for the entire month.
To purchase the 20% DP - 4% Inflation 2 Property, we're assuming you're getting a 20% down payment loan. With a $381,244.02 purchase price that means you need to have $76,248.80 for down payment.
The total cost to close must also include the rent ready costs ($0) and closing costs ($3,812.44) minus any seller concessions ($0).
Description | Amount |
---|---|
Down Payment | $76,248.80 |
Rent Ready Costs | $0 |
Closing Costs | $3,812.44 |
Seller Concessions | $0 |
Total Cost To Close: | $80,061.24 |
The monthly rent on this Property is $2,075.32 per month.
Return in Dollars + Reserves
Property | Appreciation | Cash Flow | Debt Paydown | Cash Flow from Deprec.™ | +12 Mos Reserves @ 8% | RID+R12™ Total |
---|---|---|---|---|---|---|
$15,300 | $841 | $5,238 | $1,569 | $1,936 | $24,884 | |
$15,296 | $1,465 | $4,809 | $1,575 | $1,815 | $24,961 | |
$14,043 | $1,471 | $4,379 | $1,449 | $1,660 | $23,002 | |
$12,787 | $1,477 | $3,947 | $1,321 | $1,503 | $21,035 | |
$11,527 | $1,483 | $3,514 | $1,193 | $1,345 | $19,062 | |
$10,262 | $1,489 | $3,079 | $1,064 | $1,186 | $17,081 | |
$8,994 | $1,495 | $2,644 | $934 | $1,026 | $15,092 | |
$7,721 | $1,501 | $2,206 | $803 | $865 | $13,096 | |
$6,444 | $1,507 | $1,768 | $672 | $703 | $11,093 | |
$5,163 | $1,513 | $1,328 | $539 | $540 | $9,083 | |
Totals: | $107,535 | $14,241 | $32,912 | $11,119 | $12,580 | $178,388 |
Asset Allocation
How are assets allocated? Let's first look at this month.
Copy Scenario into my Real Estate Financial Planner™ Software AccountBlueprint™ 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
- 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
- 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
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Achieved Ideal Financial Independence Goal
- Paid Off Mortgage
- Paid Off Mortgage
- Paid Off Mortgage
- Achieved 2 X Ideal Financial Independence Goal
- Final Month Summary
Reports