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10 5% Down Payment Nomad™ Rentals - Variable

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

• 2  Accounts (including  Default Cash Account)
• 2  Properties
• 7  Rules

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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.

Scenario

• Modeled for 720 months (60 years)
• 24.02% effective income tax rate
• 2% inflation rate
• 2.675% mortgage interest rate
• 4% yearly safe withdrawal rate (SWR)
• $5,000 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:  All-In-One
• $25,000 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: 20% Down Payment Rental Property

• Denver, CO
• This  Property is a Dynamic resuable template of a property that we can buy multiple copies of using  Rules.
• 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:  All-In-One
• $400,000 property value and purchase price and it goes up at a rate of 2% per year.
• 20% of purchase price for down payment.
• 2% of purchase price in closing costs at time of purchase.
• No seller concessions.
• 3.625% is the mortgage interest rate with a term of 360 month mortgage term.
• $2,200 per month in rent but rent increases at a rate of 2% per year.
• 3% of the monthly income is the assumed vacancy rate.
• 10% of the monthly income is the assumed maintenance rate.
• 0.7% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $400,000 that's about $2,800 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 $400,000 that's about $1,600 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).

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

Property Address/Description: 5% Down Payment Nomad™ Rental Property

• Denver, CO
• 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:  All-In-One
• $400,000 property value and purchase price and it goes up at a rate of 2% per year.
• 5% of purchase price for down payment.
• 2% of purchase price in closing costs at time of purchase.
• No seller concessions.
• 2.625% is the mortgage interest rate with a term of 360 month mortgage term.
• Private Mortgage Insurance (PMI) at a rate of 0.7% of the initial loan balance until the loan-to-value drops below 80%.
• $2,200 per month in rent but rent increases at a rate of 2% per year.
• 3% of the monthly income is the assumed vacancy rate.
• 10% of the monthly income is the assumed maintenance rate.
• 0.7% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $400,000 that's about $2,800 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 $400,000 that's about $1,600 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).

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 - Paycheck

• This  Rule runs for the entire  Scenario.
• Depositing paycheck into  All-In-One but no personal expenses with this  Rule.
• Personal expenses will be Inflation Adjusted.
• Gross paycheck is $6,000 Inflation Adjusted.
• Assuming no taxes on this paycheck. It is possible this is already an "after-tax" amount.
• The paycheck will stop when they reach "Financial Independence" (goal of Minimum Target Monthly Income in Retirement achieved).

Paycheck and Personal Expenses - Personal Expenses

• This  Rule runs for the entire  Scenario.
• No paycheck, but pulling expenses out of  All-In-One.
• Paycheck will be Inflation Adjusted.
• Assuming no taxes on this paycheck. It is possible this is already an "after-tax" amount.
• This paycheck will not stop at retirement.
• Personal expenses are $5,000 Inflation Adjusted per month.

Buy Property When Account Has Down Payment - Buy 10 20% Down Payment Rentals

• This  Rule runs for the entire  Scenario.
• This  Rule will buy another copy of the Dynamic (template property) 5% Down Payment Nomad™ Rental Property whenever  All-In-One 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 10  Properties maximum. But if you sell any, it will try to buy more to replace them.

Set Value On Accounts - Stock Market Variation

• This  Rule runs for the entire  Scenario.
• Changes the value of Yearly Rate of Return on  All-In-One.
• The  Rule sets the value of Yearly Rate of Return each month that it runs using a random number between -44.33 and 65.47 with a standard deviation of 18.300 in discrete steps of 0.100.
• However, values can never be lower than -44.330 and never higher than 65.470.

Set Value On Properties - Rent Appreciation Rate

This  Rule adjusts the Rent Appreciation Rate on all  Properties in the  Scenario.

• This  Rule runs for the entire  Scenario.
• Changes the value of Rent Appreciation Rate on all Dynamic (template)  Properties that you can use other  Rules to purchase.
• The  Rule sets the value of Rent Appreciation Rate each month that it runs using a random number between -10 and 14 with a standard deviation of 4.000 in discrete steps of 0.100.
• However, values can never be lower than -10.000 and never higher than 14.000.

Set Value On Properties - Appreciation Rate

This  Rule adjusts the Appreciation Rate on all  Properties in the  Scenario.

• This  Rule runs for the entire  Scenario.
• Changes the value of Appreciation Rate on all Dynamic (template)  Properties that you can use other  Rules to purchase.
• The  Rule sets the value of Appreciation Rate each month that it runs using a random number between -10 and 14 with a standard deviation of 4.000 in discrete steps of 0.100.
• However, values can never be lower than -10.000 and never higher than 14.000.

Set Value On Properties - Mortgage Interest Rate

This  Rule adjusts the Mortgage Interest Rate on just one  Property template in the  Scenario; the 5% Down Payment Nomad™ Rental Property Property template.

• This  Rule runs for the entire  Scenario.
• Changes the value of Mortgage Interest Rate on 5% Down Payment Nomad™ Rental Property.
• The  Rule adds to the previous month's value of Mortgage Interest Rate each month that it runs using a random number between -.5 and .5 with a standard deviation of 0.250 in discrete steps of 0.125.
• However, values can never be lower than 2.500 and never higher than 18.000.

Significant Events

These are the  Significant Events for this Scenario.

• Month 7  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 30  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 55  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 75  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 92  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 109  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 125  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 138  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 150  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 162  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 290  Achieved Financial Independence Goal
• Month 367  Paid Off Mortgage
• Month 390  Paid Off Mortgage
• Month 415  Paid Off Mortgage
• Month 435  Paid Off Mortgage
• Month 452  Paid Off Mortgage
• Month 469  Paid Off Mortgage
• Month 485  Paid Off Mortgage
• Month 498  Paid Off Mortgage
• Month 499  Achieved Ideal Financial Independence Goal
• Month 510  Paid Off Mortgage
• Month 522  Paid Off Mortgage
• Month 676  Achieved 2 X Ideal Financial Independence Goal