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Nomad 10 Rentals Earning $3K/mo $0 Cash Flow $100K Properties At Start Aggressive Mortgage Payoff

A 40 year plan to buy 10 rental properties while earning just $3,000 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 $3,000 in savings and you continue saving about $100 per month from your income after you buy your first home with nothing down. Your income, expenses and the amount you save are going up at a rate of 3% per year with inflation. The market has a slow steady growth of 3% per year for both appreciation and rent appreciation. Aggressively pay off your mortgages once you've acquired all your properties and saved a $40,000 inflation adjusted cash reserve. Mortgage payoff will be the lowest balance mortgage first.

The  Scenario you want to copy into your Real Estate Financial Planner™ software has the following:

  • 2  Accounts (including  Default Cash Account)
  • 3  Properties
  • 5  Rules

Please register for a Forever Free Account or Login to your existing Real Estate Financial Planner™ software to copy this  Scenario into your account.

Create "Forever Free" Account

Once it is in your account, you can view detailed  Charts for dozens of variables and edit any of the assumptions for  Accounts,  Properties, and  Rules to run your own what-if  Scenarios.

You can change things like:

  • Adjust how much money you start with in any  Account
  • Model variable stock, bond and real estate rates of returns
  • Change how many  Properties you buy and when you buy them
  • Set your own personalized target monhtly income in retirement to indicate when you reach financial independence
  • Model receiving social security payments when you reach a certain age
  • See what happens if there is a market crash or correction for your stocks, bonds and/or your real estate
  • Tweak price and rent appreciation rates for individual  Properties or all your  Properties
  • Find out what happens if you pay off your mortgages early... with cash flow each month or only when you have enough to pay off the  Property in full
  • Use equity in  Properties you own to cash-out refinance and buy more  Properties or invest it elsewhere
  • Model buying more  Properties than you need then selling off any extras to pay off the remaining  Properties to achieve your own user-defined financial independence number
  • Evaluate your own safe withdrawal rate and see how it impacts your investment plan
  • And much, much more...

Scenario

  • Modeled for 480 months (40 years)
  • 15% effective income tax rate
  • 3% inflation rate
  • 4.875% mortgage interest rate
  • 4% yearly safe withdrawal rate (SWR)
  • $10,000 minimum target monthly income in retirement (MTMIR) in today's dollars
  • $20,000 ideal target monthly income in retirement (ITMIR) in today's dollars

Accounts

Summary of assumptions for the Account in this Scenario.

  • Account Name:  Stock Market - Start with $3,000 and Earns 8% Per Year
  • $3,000 starting account balance
  • 8% yearly rate of return (at start)
  • Asset Type: Cash

Properties

Summary of assumptions for Properties in this Scenario (at the start of the Scenario).

Property Address/Description: 0% Down $100K Nomad: $0 CF

  • This  Property is a Dynamic resuable template of a property that we can buy multiple copies of using  Rules.
  • This  Property is a Nomad™ property that you live in until you buy your next owner-occupant property. When you buy your next Nomad™ property, this one becomes a rental.
  • This  Property uses dynamic  Rules to determine when we buy/sell it in the  Scenario.
  • Account for down payment, income and expenses for this  Property:  Stock Market - Start with $3,000 and Earns 8% Per Year
  • $100,000 property value and purchase price and it goes up at a rate of 3% per year.
  • 0% of purchase price for down payment.
  • 1% of purchase price in closing costs at time of purchase.
  • 1% of purchase price in seller concessions to help with closing costs at time of purchase.
  • 4.675% is the mortgage interest rate with a term of 360 month mortgage term.
  • No monthly Private Mortgage Insurance (PMI). It is possible it is being included as a single up-front, lump-sum payment in the Closing Costs or as a lender-paid PMI in the interest rate.
  • $711.69 per month in rent but rent increases at a rate of 3% per year.
  • 3% of the monthly income is the assumed vacancy rate.
  • 10% of the monthly income is the assumed maintenance rate.
  • 0.75% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $100,000 that's about $750 per year in property taxes at the start and it changes as the property value changes.
  • 0.5% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $100,000 that's about $500 per year in insurance costs at the start and it changes as the property value changes.
  • This is a residential property and 15% of purchase price is considered the value of the land (when doing our depreciation calculation).

Return in Dollars Quadrant™

The following is the estimated Return in Dollars Quadrant™ for this property based on its original assumptions for the first year.

Return On Investment Quadrant™

The following are the estimated Return on Investment Quadrant™ for this property for year 1. We take the returns for each component and divide by the "Total Cost to Close" (down payment, rent ready costs, closing costs - seller concessions). This first one ignores reserves.

ROIQ+R6™

Return on Investment Quadrant™ with 6 months of reserves at 1%.

ROIQ+R12™

Return on Investment Quadrant™ with 12 months of reserves at 8%.

How to Calculate

See the steps walking you through how to calculate various metrics for this property.

Walkthrough how to calculate...

Property Address/Description: 3% Down $100K Nomad: $0 CF

  • This  Property is a Dynamic resuable template of a property that we can buy multiple copies of using  Rules.
  • This  Property is a Nomad™ property that you live in until you buy your next owner-occupant property. When you buy your next Nomad™ property, this one becomes a rental.
  • This  Property uses dynamic  Rules to determine when we buy/sell it in the  Scenario.
  • Account for down payment, income and expenses for this  Property:  Stock Market - Start with $3,000 and Earns 8% Per Year
  • $100,000 property value and purchase price and it goes up at a rate of 3% per year.
  • 3% of purchase price for down payment.
  • 1% of purchase price in closing costs at time of purchase.
  • 1% of purchase price in seller concessions to help with closing costs at time of purchase.
  • 4.675% is the mortgage interest rate with a term of 360 month mortgage term.
  • No monthly Private Mortgage Insurance (PMI). It is possible it is being included as a single up-front, lump-sum payment in the Closing Costs or as a lender-paid PMI in the interest rate.
  • $693.91 per month in rent but rent increases at a rate of 3% per year.
  • 3% of the monthly income is the assumed vacancy rate.
  • 10% of the monthly income is the assumed maintenance rate.
  • 0.75% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $100,000 that's about $750 per year in property taxes at the start and it changes as the property value changes.
  • 0.5% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $100,000 that's about $500 per year in insurance costs at the start and it changes as the property value changes.
  • This is a residential property and 15% of purchase price is considered the value of the land (when doing our depreciation calculation).

Return in Dollars Quadrant™

The following is the estimated Return in Dollars Quadrant™ for this property based on its original assumptions for the first year.

Return On Investment Quadrant™

The following are the estimated Return on Investment Quadrant™ for this property for year 1. We take the returns for each component and divide by the "Total Cost to Close" (down payment, rent ready costs, closing costs - seller concessions). This first one ignores reserves.

ROIQ+R6™

Return on Investment Quadrant™ with 6 months of reserves at 1%.

ROIQ+R12™

Return on Investment Quadrant™ with 12 months of reserves at 8%.

How to Calculate

See the steps walking you through how to calculate various metrics for this property.

Walkthrough how to calculate...

Property Address/Description: 5% Down $100K Nomad: $0 CF

  • This  Property is a Dynamic resuable template of a property that we can buy multiple copies of using  Rules.
  • This  Property is a Nomad™ property that you live in until you buy your next owner-occupant property. When you buy your next Nomad™ property, this one becomes a rental.
  • This  Property uses dynamic  Rules to determine when we buy/sell it in the  Scenario.
  • Account for down payment, income and expenses for this  Property:  Stock Market - Start with $3,000 and Earns 8% Per Year
  • $100,000 property value and purchase price and it goes up at a rate of 3% per year.
  • 5% of purchase price for down payment.
  • 1% of purchase price in closing costs at time of purchase.
  • 1% of purchase price in seller concessions to help with closing costs at time of purchase.
  • 4.675% is the mortgage interest rate with a term of 360 month mortgage term.
  • No monthly Private Mortgage Insurance (PMI). It is possible it is being included as a single up-front, lump-sum payment in the Closing Costs or as a lender-paid PMI in the interest rate.
  • $682.07 per month in rent but rent increases at a rate of 3% per year.
  • 3% of the monthly income is the assumed vacancy rate.
  • 10% of the monthly income is the assumed maintenance rate.
  • 0.75% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $100,000 that's about $750 per year in property taxes at the start and it changes as the property value changes.
  • 0.5% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $100,000 that's about $500 per year in insurance costs at the start and it changes as the property value changes.
  • This is a residential property and 15% of purchase price is considered the value of the land (when doing our depreciation calculation).

Return in Dollars Quadrant™

The following is the estimated Return in Dollars Quadrant™ for this property based on its original assumptions for the first year.

Return On Investment Quadrant™

The following are the estimated Return on Investment Quadrant™ for this property for year 1. We take the returns for each component and divide by the "Total Cost to Close" (down payment, rent ready costs, closing costs - seller concessions). This first one ignores reserves.

ROIQ+R6™

Return on Investment Quadrant™ with 6 months of reserves at 1%.

ROIQ+R12™

Return on Investment Quadrant™ with 12 months of reserves at 8%.

How to Calculate

See the steps walking you through how to calculate various metrics for this property.

Walkthrough how to calculate...

Rules

These are the Rules included with this Scenario.

Paycheck and Personal Expenses

  • This  Rule runs for the entire  Scenario.
  • Depositing both your paycheck and pulling expenses out of the same  Stock Market - Start with $3,000 and Earns 8% Per Year.
  • Both paycheck and personal expenses will be Inflation Adjusted.
  • Gross paycheck is $3,000 Inflation Adjusted.
  • Assuming a tax rate of 13.7% on your paycheck.
  • Net paycheck (after taxes) is $2,589 Inflation Adjusted per month.
  • This paycheck will not stop at retirement.
  • Personal expenses are $1,869.47 Inflation Adjusted per month.

Buy Property When Account Has Down Payment

  • This  Rule runs for the entire  Scenario.
  • This  Rule will buy another copy of the Dynamic (template property) 0% Down $100K Nomad: $0 CF whenever  Stock Market - Start with $3,000 and Earns 8% Per Year has enough for down payment and closing costs.
  • This  Rule ignores Debt-To-Income ratio.
  • This  Rule will only buy 1  Properties maximum. But if you sell any, it will try to buy more to replace them.

Buy Property When Account Has Down Payment

  • This  Rule runs for the entire  Scenario.
  • This  Rule will buy another copy of the Dynamic (template property) 3% Down $100K Nomad: $0 CF whenever  Stock Market - Start with $3,000 and Earns 8% Per Year has enough for down payment and closing costs...
    • Plus at least $3,000 Inflation Adjusted left over in the  Account
  • This  Rule ignores Debt-To-Income ratio.
  • This  Rule will only buy 2  Properties maximum. But if you sell any, it will try to buy more to replace them.

Buy Property When Account Has Down Payment

  • This  Rule runs for the entire  Scenario.
  • This  Rule will buy another copy of the Dynamic (template property) 5% Down $100K Nomad: $0 CF whenever  Stock Market - Start with $3,000 and Earns 8% Per Year has enough for down payment and closing costs...
    • Plus at least $5,000 Inflation Adjusted left over in the  Account
  • This  Rule ignores Debt-To-Income ratio.
  • This  Rule will only buy 8  Properties maximum. But if you sell any, it will try to buy more to replace them.

Pay Down Loans with Cash Flow

  • This  Rule runs for the entire  Scenario.
  • When  Stock Market - Start with $3,000 and Earns 8% Per Year has extra money, use the extra money to pay off mortgages.
  • Only pay off properties when money in  Account is in excess of:
    • At least $40,000 Inflation Adjusted
  • Pay down the lowest balance loan first.

Significant Events

These are the  Significant Events for this Scenario.

  • Month 1  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 20  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 35  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 57  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 69  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 81  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 93  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 105  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 117  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 129  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 141  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 172  Paid Off Mortgage
  • Month 192  Paid Off Mortgage
  • Month 208  Paid Off Mortgage
  • Month 223  Paid Off Mortgage
  • Month 236  Paid Off Mortgage
  • Month 247  Paid Off Mortgage
  • Month 258  Paid Off Mortgage
  • Month 267  Paid Off Mortgage
  • Month 277  Paid Off Mortgage
  • Month 286  Paid Off Mortgage
  • Month 294  Paid Off Mortgage
  • Month 467  Achieved Financial Independence Goal