The Real Estate Financial Planner Blueprint™
Ep 23 Norm and Norma - $25K Fix and Flips Every 6 Months - Buy 20% Down Payment Rentals
The Risk Report shows a variety of risk measures for your
Total Debt To Net Worth
Be aware that not all Net Worth is easily accessible and some of it could be consumed in the costs of accessing it. For that reason, you may like the
Sometimes folks improve their
While there are exceptions to just about every rule in life, in general, typically you'd want to see your risk (in this case measured as
Sometimes it is difficult to think about future dollar amounts as inflated values. It may be easier to think of them in what they're worth in today's, inflation adjusted dollars. That's what these versions of the same
Total Debt To Account Balance
The charts above show future, inflated dollars. Here are the inflation adjusted versions of the same charts.
Since you have 2
And, here is the inflation adjusted version of the same chart. Dollars are today's dollars below.
Total Rent Resiliency™ Percent
Rent Resiliency™ is another measure of risk. It tells us how resilient the rent you're collecting is to maintain positive cash flow.
Some folks may have a large number of properties with a small amount of cash flow. But if rents dropped even $100 per month, a large percentage of their cash flow could be eliminated. This would be an example of having very poor (low) Rent Resiliency™.
Alternatively, some folks may have free and clear properties with no mortgage. If rent drops $100, it will reduce their cash flow, but a much smaller percentage of their overall cash flow. This would be an examplke of excellent (high) Rent Resiliency™. The more your rent can decline and still have positive cash flow, the more resilient you are to rent reduction shocks and therefore the less risky your portfolio is.
If you'd like to see how resilient each
What typically improves Rent Resiliency™?
- Cash out refinancing
- Higher expenses including taxes, insurance, maintenance, property management
- Below market rents
What typically hurts Rent Resiliency™?
- Rate and term refinances that lower your monthly payments on
- Paying off
- Well managed properties with optimized taxes, insurance, maintenance, property management
- Higher rents
If you'd like to see which