Why Don’t You Have More Real Estate Financial Planner Blueprints Made?

On Friday, I called Holly to talk to her about making some additional Blueprints™ so that people can see an “investing strategy” that closely matches their personal situation and see how it performs. If they want to modify it a bit, they could copy it to their own Real Estate Financial Planner™ software account and make changes to see how tweaking stuff would impact the cash flow, net worth and about a hundred other metrics.

I described to her how we wanted to take several different monthly incomes like:

  • $1,000
  • $1,500
  • $2,000
  • $2,500
  • $3,000
  • $3,500
  • $4,000
  • $4,500
  • $5,000
  • $6,000
  • $7,000
  • $8,000
  • $9,000
  • $10,000
  • $11,000
  • $12,000
  • $13,000
  • $14,000
  • $15,000
  • $20,000
  • $25,000
  • $30,000
  • $35,000
  • $40,000
  • $45,000
  • $50,000

In total there were about 26 different monthly incomes that I was going to ask Holly to create a Blueprint™ for.

Then, for each monthly income, I was going to ask her to create a differnet Blueprint™ with how many months of savings they had to start with in their Bank Account. This idea was based loosely on an article, Here's how much money people in their 30s have in their 401(k)s, my friend Royce had sent over that discussed how much money folks at different phases in their life should have saved for retirement. I thought it would be interesting for a visitor to the website to be able to pick how much they make each month and how much they have saved and see how that plan looks.

So, for each income level I'd show a variation of a Blueprint™ with a certain number months of income saved:

  • 0.5
  • 1.0
  • 1.5
  • 2.0
  • 2.5
  • 3.0
  • 3.5
  • 4.0
  • 4.5
  • 5.0
  • 6.0
  • 7.0
  • 8.0
  • 9.0
  • 10.0
  • 11.0
  • 12.0
  • 13.0
  • 14.0
  • 15.0
  • 20.0
  • 24.0
  • 25.0
  • 30.0
  • 35.0
  • 36.0
  • 40.0
  • 42.0
  • 45.0
  • 50.0
  • 55.0
  • 60.0
  • 72.0
  • 84.0
  • 96.0
  • 108.0
  • 120.0

In total there were about 37 of these.

If you take 26 income levels times 37 different months of income saved, you get 962 different Blueprints™ that I was going to ask her to make. A good week or so of work since she can copy and modify a Scenario to make a slight change to it.

But, then, for each of those I was going to ask her to make a Blueprint™ for each where their income does increase with inflation and one where they do not get regular inflation-based raises. Some people believe they'll get raises over time; others don't.

That means she'd be making 962 times 2 or about 1,924 Blueprints™.

Then, I was going to ask her to vary how much each was saving per month and adding to their Bank Account at the beginning of the Scenario:

  • -$100
  • -$75
  • -$50
  • -$25
  • $0
  • $25
  • $50
  • $75
  • $100
  • $125
  • $150
  • $175
  • $200
  • $250
  • $300
  • $400
  • $500
  • $600
  • $700
  • $750
  • $800
  • $900
  • $1,000
  • $1,100
  • $1,200
  • $1,300
  • $1,400
  • $1,500
  • $1,750
  • $2,000
  • $2,500
  • $3,000

This could easily be another 32 variations from how much they save each month for each of the situations we previous discussed.

32 new options times 1,924 previous Blueprints™ = 61,568 Blueprints™ to make.

Do they buy a nothing down Nomad™ Property first or not? That's two more options (whether they do a nothing down Nomad™ Property first or not) = 123,136 Blueprints™ to make.

Do they buy a 3% down payment Nomad™ Property next or 2 Nomad™ Properties sequentially? That adds an additional 3 more options (none, 1 or 2). That means 123,136 Blueprints™ times 3 which equals 369,408 Blueprints™ to make.

Do they buy 5% down payment Nomad™ Properties after that? How many? You are not actually limited in how many you can do... so, it could be 0, 1, 2, 3...20 or more. That's 20 more options times the 369,408 Blueprints™ which is 7,388,160 Blueprints™.

Do they buy 15% down payment non-owner-occupant Properties? How many? It is pretty easy to get 10 non-owner-ocupant Property per spouse... so, anywhere between 0 and 20 is reasonable... that's another 21 options times 7,388,160 Blueprints™. That is 155,151,360 Blueprints™ to make. That's 155.15 million Blueprints™... and we're not done.

Same thing with 20% down payment non-owner-occupant Properties? 0-20... that's another 21 options times 155.15 million = 3.26 billion Blueprints™.

What is the interest rate or ROI on the Bank Account they have their savings in? 0, 1, 2... 12% per year? That's another, at least 10 choices = 32.58 billion Blueprints™.

At what rate are the Properties appreciating? Is it negative and they're actually going down in value? Is it flatlined and they are appreciating at 0% per year? 1%, 2%, 3%, 6%, more? There's probably at least 10 reasonable choices here as well.

How about rent appreciation? Same choices as Property appreciation? That's another 10 choices.

How about the amount the Properties are cash flowing when they buy? -$100, -$50, $0, $25, $50, $75, $100 per month? Probably another 10 options for creating Blueprints™ here too.

Paying property management? How much? Managing it yourself? That's zero. Just paying for tenant placement? Full service? Getting a discount for multiple Properties? Another 5 choices easily.

Pay off loans with any extra cash you have in your Account or not? That's two more options.

Take the most recent additional choices from above: 10 * 10 * 10 * 5 * 2 = an increase of a factor of 10,000 = 325.82 trillion Blueprints™.

Allow cash out refinances of Properties you already own to purchase more Properties or not? That's at least 2 more choices.

What about the interest rates you're able to get when you buy Properties? 3.5%, 3.625%, 3.75%, 4%... or maybe you're thinking in the 5% range... or maybe 6%... that's at least another 10 choices.

Buying Properties for full retail price or buying them at a discount? Rolling in closing costs to the loan or not?

Without getting too crazy... Holly was going to be making 65.16 quadrillion Blueprints™.

So, instead of having her do that manually, I started thinking about writing software that would loop through each option and make the Accounts, Properties, Rules and therefore the Scenarios and Blueprints™ through brute force coding.

However... the data size gave me pause.

We're talking about 65.16 quadrillion Scenarios. That's at least 65.16 quadrillion Accounts (one for each Scenario). That's probably, on average, 10 times that number or 651.64 quadrillion Properties.

Since we save 480 months of data for each Account and for each Property that's 31.28 quintillion months of Account data or more likely 312.79 quintillion rows of monthly data for Properties... and since we easily have 10 data points per month (properties have closer to 50 per month) that's about 3,127.85 quintillion data points saved.

Can I code that? Sure... but for... what might be the first time... I am actually asking myself... SHOULD I code that?

Instead, users can make their own Scenarios consisting of their own Accounts, Properties, Rules and Goals by creating a Free Account (or Login if you already have a free account).

And, at some point in the future, I might create an easy tool that asks some of the questions above and makes the Scenario and corresponding Blueprint™ for you on demand.

P.S. If each Scenario takes about 5 minutes to run (which is pretty close), then it would take approximately the following time to process all 65.16 quadrillion Scenarios based on how long it takes to process Scenarios:

  • 226.26 trillion days
  • 32.32 trillion weeks
  • 619.90 billion years
  • 61.99 billion decades
  • 6.20 billion centuries

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