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Copy this new  Scenario to your Real Estate Financial Planner™ software:

J-11 100% Stocks, 30% Savings, 11 Nomads 5% DP, 3 RM/SH - $1,800/mo, Sell By Cap Rate

Earning is $70,000 per year. Taxes are national and Colorado: 24.71%. 30% of gross income assumed for savings. Therefore, $4,083.33 is what we need to target as monthly income in retirement.

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

  • 2  Accounts (including  Default Cash Account)
  • 1  Properties
  • 4  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.

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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.

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 720 months (60 years)
  • 24.71% effective income tax rate
  • 3% inflation rate
  • 5.125% mortgage interest rate
  • 3.25% yearly safe withdrawal rate (SWR)
  • $4,083.33 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
  • $0 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 - 5% DP

  • 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:  VTSMX with CAGR of 8.97% over 1871-2017
  • $350,000 property value and purchase price and it goes up at a rate of 3% per year.
  • 5% of purchase price for down payment.
  • 2.5% of purchase price in closing costs at time of purchase.
  • No seller concessions.
  • 4.375% 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.
  • $2,000 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.
  • 1% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $350,000 that's about $3,500 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 $350,000 that's about $1,400 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%.

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  VTSMX with CAGR of 8.97% over 1871-2017.
  • Both paycheck and personal expenses will be Inflation Adjusted.
  • Gross paycheck is $5,833.33 Inflation Adjusted.
  • Assuming a tax rate of 24.71% on your paycheck.
  • Net paycheck (after taxes) is $4,391.91 Inflation Adjusted per month.
  • The paycheck will stop when they reach "Financial Independence" (goal of Minimum Target Monthly Income in Retirement achieved).
  • Personal expenses are $2,641.91 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) Typical Family Home - 5% DP whenever  VTSMX with CAGR of 8.97% over 1871-2017 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 11  Properties maximum. But if you sell any, it will try to buy more to replace them.

Paycheck and Personal Expenses

  • This  Rule runs for the entire  Scenario.
  • Depositing paycheck into  VTSMX with CAGR of 8.97% over 1871-2017 but no personal expenses with this  Rule.
  • Personal expenses will be Inflation Adjusted.
  • Gross paycheck is $1,800 Inflation Adjusted.
  • Assuming a tax rate of 24.71% on your paycheck.
  • Net paycheck (after taxes) is $1,355.22 Inflation Adjusted per month.
  • The paycheck will stop when they reach "Financial Independence" (goal of Minimum Target Monthly Income in Retirement achieved).

Sell Properties and Pay Off Mortgages To Retire

Significant Events

These are the  Significant Events for this Scenario.

  • Month 10  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 22  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 34  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 46  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 58  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 70  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 82  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 94  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 106  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 118  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 130  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 160  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 161  Paid Off Mortgage
  • Month 161  Paid Off Mortgage
  • Month 161  Paid Off Mortgage
  • Month 172  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 173  Achieved Financial Independence Goal
  • Month 184  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 196  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 208  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 220  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 232  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 244  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
  • Month 520  Paid Off Mortgage
  • Month 532  Paid Off Mortgage
  • Month 534  Achieved Ideal Financial Independence Goal
  • Month 544  Paid Off Mortgage
  • Month 556  Paid Off Mortgage
  • Month 568  Paid Off Mortgage
  • Month 580  Paid Off Mortgage
  • Month 592  Paid Off Mortgage
  • Month 604  Paid Off Mortgage
  • Month 677  Achieved 2 X Ideal Financial Independence Goal