The Real Estate Financial Planner Blueprint™
Nomad 10 Rentals, Earning $5K/mo No Income/Expense Inflation, $0 Cash Flow $150K Properties At Start, Saving $25/mo

Blueprint™ Menu of Sections

Introduction

Before we get deep into the details of the Blueprint™, I want to do three things: thank you, congratulate you, and give you some background.

First, thank you for reading this Blueprint™ and demonstrating that you're committed to studying and evaluating your investment strategy.

"Success is stumbling from failure to failure with no loss of enthusiasm."
— Winston Churchill

Second, congratulations... you've taken an important step toward better understanding how investing works. Before I lost almost everything in the Great Recession, before my personal bankruptcy, before the rental Property foreclosures... I thought I knew it all. I had acquired a multi-million dollar real estate portfolio and my ego suggested I knew everything. I wish I could go back in time and slap that arrogant young man. I now realize that while I know a lot, I still gain new knowledge daily and I do not know everything. Far from it.

Using The Real Estate Financial Planner™ software that generates this Blueprint™ helps me learn and helps you learn. It teaches us where strategies are strong—and probably more importantly—where they are weak. It gives us unparalleled insight into how a portfolio of Properties performs together, as a group. It allows us to run countless what-if Scenarios to see what would happen if this and this and this happened not just to one Property, but to my entire portfolio including my real estate and other investments like stocks, mutual funds and bonds.

I want to congratulate you because you are being smarter than I was by seeking out this information, studying, planning and learning before doing. I wish I had.

I won't pretend to know all the answers, but hopefully together, with the help of The Real Estate Financial Planner™ software and this Blueprint™ we can both become better investors and better stewards of our money.

And third and finally, a little background: I believe many of you would like to know some of the methodology behind how we do the modeling to create these Blueprints™. With that in mind, here is a big picture overview of how we model investment strategies and how you can edit our assumptions if you'd like to see how that changes the results.

Scenarios

Using The Real Estate Financial Planner™ software we can combine Accounts, Properties and Rules together to form a Scenario.

Accounts

Accounts are places where you store or invest money. In some Scenarios you might have an Account that represents your stock market brokerage Account. You may also have an Account representing your IRA or 401K. Or, another Account that you use to save up for down payments to purchase additional Properties.

Properties

Properties are real estate you own. They can be single family homes, duplexes, triplexes, fourplexes, or even apartment buildings. They can be commercial, industrial or residential Properties. They can be Properties you live in, Properties you rent or special Properties you live in for a period of time and then convert to rentals later (what we call the Nomad™ investing strategy). Properties can be a specific Property with a specific address or it can be a Dynamic Property that represents a type that you might buy more than one of over time.

Rules

Rules allow us to manipulate both Accounts and Properties.

For example, we might have a Rule that deposits a certain amount of money into our Account each month like a paycheck. A Rule could also withdraw expenses each month from an Account.

Rules might also allow you to buy a Dynamic Property each time that your Account has saved enough for a down payment.

Rules can be used to change what return you are earning on Accounts. You might use this to model the erratic returns of the stock market. Similarly, you can use Rules to vary how quickly or slowly Property values are going up or down (appreciation) or how quickly or slowly rents are going up or down (rent appreciation).

Blueprints

When we provide a super-detailed narrative explaining a Scenario we call that a Blueprint™.

Blueprints™ are narrated explanations of Scenarios we created that go over a specific strategy with specific assumptions.

With each Blueprint™ we walk you through the purchase of each Property.

We explain how each Rule impacts each Account and Property.

Plus, we summarize how they all combine to affect your personal net worth, cash flow and much more.

Blueprints™ are like detailed, step-by-step plans for you to evaluate how a specific investment strategy works based on the assumptions entered for that unique combination of Accounts, Properties and Rules for that Scenario.

Significant Events

When we are narrating what happens in a specific Scenario within a Blueprint™ we use the idea of Significant Events to document important things that happen in the Scenario.

A Significant Event might be buying a new Property or renting a Property. It might be selling a Property.

We use Significant Events to know where to pause and show you what is happening with your Accounts and Properties.

Editing Scenarios

Sometimes you will be reading through a Blueprint™ and you will think to yourself, I wonder how changing this one thing impacts how everything else turns outs. You have the ability to edit Scenarios with The Real Estate Financial Planner™ software: you can change the variables that make up Accounts, Properties and Rules.

In fact, you can choose to modify an existing Scenario or start over with a new Scenario from scratch to model your specific situation.

Copy Scenario into my Real Estate Financial Planner™ Software Account

The Blueprint™

Nomad 10 Rentals, Earning $5K/mo No Income/Expense Inflation, $0 Cash Flow $150K Properties At Start, Saving $25/mo is summarized as a narrative Blueprint™ below.

A 40 year plan to buy 10 rental properties while earning just $5,000 per month using the Nomad strategy of buying a house, living there for at least a year until you save up your next down payment then converting that property to a rental and buying your next owner-occupant property. While saving your down payments, you're able to invest in the stock market and earn 8% per year. The properties you buy are based on properties that have break-even cash flow when we started the scenario. You start with $5,000 in savings and you continue saving about $25 per month from your income after you buy your first home with nothing down. Your income and expenses do not increase with inflation; you're earning $5,000 per month in month 1 and in month 480. The market has a slow steady growth of 3% per year for both appreciation and rent appreciation.

Accounts, Properties and Rules for this Scenario

First, I will walk you through each of the Accounts, Properties and Rules that make up this Scenario. Then, after you learn what the component parts are for this Scenario, I will take you through each Significant Event for the entire Scenario.

This Scenario is made up of the following Accounts, Properties and Rules.

Copy Scenario into my Real Estate Financial Planner™ Software Account

Blueprint™ Menu of Sections

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