Copy Scenario
Copy this new Scenario to your Real Estate Financial Planner™ software:
10 20% DP Rentals
Scenario set up for 3 part webinar with Chris Lopez and Joe Massey. This one is buying ten 20% down payment properties.
The Scenario you want to copy into your Real Estate Financial Planner™ software has the following:
- 2
Accounts (including
)Default Cash Account
- 1
Properties
- 2
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.
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
you own to cash-out refinance and buy moreProperties
or invest it elsewhereProperties
- 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)
- 23.11% effective income tax rate
- 3% inflation rate
- 5.75% mortgage interest rate
- 3.25% yearly safe withdrawal rate (SWR)
- $4,000 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:
VTSMX with CAGR of 8.97% over 1871-2017
- $60,000 starting account balance
- 8.97% yearly rate of return (at start)
- Asset Type: Cash
Properties
Summary of assumptions for the Property in this scenario (at the start of the
Scenario).
Property Address/Description: Typical Family Home 20% DP
- This
is a Dynamic resuable template of a property that we can buy multiple copies of usingProperty
.Rules
- This
uses dynamicProperty
to determine when we buy/sell it in theRules
.Scenario
- Account for down payment, income and expenses for this
:Property
VTSMX with CAGR of 8.97% over 1871-2017
- $300,000 property value and purchase price and it goes up at a rate of 3% per year.
- 20% of purchase price for down payment.
- 1% of purchase price in closing costs at time of purchase.
- No seller concessions.
- 5.75% is the mortgage interest rate with a term of 360 month mortgage term.
- $1,933.64 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 $300,000 that's about $2,250 per year in property taxes at the start and it changes as the property value changes.
- 0.4% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $300,000 that's about $1,200 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.
How to Calculate
See the steps walking you through how to calculate various metrics for this property.
Walkthrough how to calculate...
- Gross Potential Profit
- Gross Operating Income
- Operating Expenses
- Net Operating Income
- Cap Rate
- Cash Flow
Rules
These are the Rules included with this
Scenario.
Paycheck and Personal Expenses
- This
runs for the entireRule
.Scenario
- Depositing both your paycheck and pulling expenses out of the same
VTSMX with CAGR of 8.97% over 1871-2017.
- Both paycheck and personal expenses will be Inflation Adjusted.
- Gross paycheck is $5,000 Inflation Adjusted.
- Assuming a tax rate of 23.11% on your paycheck.
- Net paycheck (after taxes) is $3,844.50 Inflation Adjusted per month.
- This paycheck will not stop at retirement.
- Personal expenses are $2,844.50 Inflation Adjusted per month.
Buy
Property When
Account Has Down Payment
- This
runs for the entireRule
.Scenario
- This
will buy another copy of the Dynamic (template property)Rule
Typical Family Home 20% DP whenever
VTSMX with CAGR of 8.97% over 1871-2017 has enough for down payment and closing costs...
- Plus at least $10,000 Inflation Adjusted left over in the
Account
- This
ignores Debt-To-Income ratio.Rule
- This
will only buy 10Rule
maximum. But if you sell any, it will try to buy more to replace them.Properties
Significant Events
These are the Significant Events
Scenario.
- Month 11
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 54
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 90
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 119
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 144
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 165
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 183
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 199
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 213
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 226
Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
- Month 257
Achieved Financial Independence Goal
- Month 371
Paid Off Mortgage
- Month 414
Paid Off Mortgage
- Month 450
Paid Off Mortgage
- Month 479
Paid Off Mortgage