The Real Estate Financial Planner Blueprint™
02 Nomad™ Earn 10% Less Income from Job

Properties

So, let's go over the different Properties that are included with this Scenario. Later, when we go through each Significant Event, we can go through more specific numbers about that event. For now, I'll share with you our basic assumptions for each of the Properties.

Of course, you can use The Real Estate Financial Planner™ software to modify any of these assumptions (or more than one) to see how that would impact the plan.

Let's jump into it.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jun 2028 (Month 40) for $216,276.03 as a Nomad™

First, the Typical Tyler, Texas Nomad™ Property Property is a special type of Property we call Dynamic in The Real Estate Financial Planner™ software.

Dynamic Property

Dynamic Properties are based on a reusable template Property so we can buy multiple copies of it.

For example, let's say you wanted to model what it looks like to buy basically the least expensive new construction Property in your market every year for 10 years. Instead of having to create 10 different Properties in The Real Estate Financial Planner™ software, you could create one Dynamic Property and use Rules to buy one of them each year.

Dynamic Properties go up in value each year based on the appreciation rate you define just like Properties you own. So, the copy of the Dynamic Property you buy in year 10 is usually much more expensive than the copy of the Dynamic Property you buy in year 1 in our example. We also model rent appreciation. The rent you would collect would likely be higher if you used a positive rent appreciation rate.

With The Real Estate Financial Planner™ software you can use multiple Dynamic Properties with different characteristics to simulate changing real estate markets during your model. If you want to see what happens if you have a market downturn in a few years and how that impacts your Scenario, you could, for example, set up the Dynamic Property for your first 3 Properties to be different than the Dynamic Property that you use for your 4th through 10th purchases. Or, another way to model this would be with using Rules that change the appreciation rate, rent appreciation rate and dozens of other variables instead of using multiple Dynamic Properties. Either method of modeling works and which you decide to use is up to you. The Real Estate Financial Planner™ software is about giving you the tools to model as you see the world.

The opposite of Dynamic Properties is a specific Property you've purchased. In The Real Estate Financial Planner™ software, we would use this for Properties you have already purchased since you won't be buying that exact same Property again. Although, you could take a Property that you purchased in the past and say: I'm going to buy 10 properties exactly like this and make it a Dynamic Property to model buying them repeatedly.

Another way to think about the difference between Dynamic Properties and regular Properties is that you need to use Rules to purchase and sell a Dynamic Property because they don't use fixed dates for purchase and sale.

Back to the Property we are discussing for this Scenario: Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property.

Nomad™ Property

The Typical Tyler, Texas Nomad™ Property Property is a special type of Property called a Nomad™ Property. With Nomad™ Properties we are moving into the Property when we buy it then, when we buy the next Nomad™ Property, we convert the Property we were living in to a rental and move into the new Property.

If this is the first time you are hearing about this strategy, you are in for a treat. It is one of the most powerful real estate investing strategies for acquiring a portfolio of cash flowing rental Properties over time. We will talk more about the Nomad™ strategy below but for complete information about Nomad™ check out the list of classes we’ve taught on this subject listed below.

Additional Nomad™ Resources

Nomad™ 101 Class Recording
https://app.RealEstateFinancialPlanner.com/nomad-101-2019-edition/

House Hacking versus Nomad™ Class Recording
https://app.RealEstateFinancialPlanner.com/house-hacking-versus-nomad-2019-edition/

Your Second Nomad™ Property Class Recording
https://app.RealEstateFinancialPlanner.com/your-second-nomad-property/

Your Third Nomad™ Property Class Recording
https://app.RealEstateFinancialPlanner.com/your-third-nomad-property/

Buying New Houses as Investments and Nomads™ Class Recording
https://app.RealEstateFinancialPlanner.com/buying-new-houses-as-investments-and-nomads/

How to do Nomad™ without Moving into Properties Class Recording
https://app.RealEstateFinancialPlanner.com/how-to-nomad-without-moving-into-properties/

How to Acquire a Multi-Million Dollar Investment Portfolio while Earning $5,000 per Month Class Recording
https://app.RealEstateFinancialPlanner.com/how-to-acquire-a-multi-million-dollar-investment-portfolio-while-earning-just-5k-month-2019-edition/

The Two Best Investing Strategies for our Market Right Now Class Recording
https://app.RealEstateFinancialPlanner.com/the-two-best-investing-strategies-for-our-market-right-now/

With the Nomad™ strategy you can get owner-occupant financing since you are moving into the Property and living there for the term required to comply with the lender. The term is usually a year and is set by the lender. Owner-occupant financing allows you to get lower interest rates than non-owner-occupant rates which improves cash flow.

If you are opting to use a more leveraged approach to minimize how much you are investing while acquiring your portfolio, the Nomad™ strategy allows you to invest less than one-fourth of what you would need in down payments if you were using a more traditional non-owner-occupant down payment strategy with 20% down payment loans. This is true because you can acquire owner-occupant Properties with 5% down payments instead of the 20% down payments required for most non-owner-occupant Properties.

Plus, when you are acquiring properties as a Nomad™ you won't hit the 10 Property limit that often pushes investors into adjustable rate mortgage portfolio loans. For real estate investors that are buying non-owner-occupant Properties with conventional financing, once you reach 10 loans total for your social security number, you often need to seek out portfolio lenders that are not selling their loans on the secondary market. Instead, these lenders keep the loans at the bank in the bank's portfolio (hence the name: portfolio lender). If you are doing the more traditional route of putting 20% (or more) down payment to acquire rental Properties, it may have occurred to you that you can get 10 loans in your name and social security number and your spouse can get 10 loans in their name and social security number to give you a combined total of 20 loans between the both of you. This does require that you qualify for your 10 Properties on your own and your spouse be able to qualify for the other 10 on their own. As a Nomad™ you don't have to do this since you get more than 10 loans as a Nomad™ in both you and your spouse's name.

Of course, this and many other lending guidelines have changed over time and I expect they will change in the future as well. At some point you may be able to get more than 10 loans per social security number. Or, it might be less. When that does change, you can change the model with The Real Estate Financial Planner™ software to adjust your Scenario and see how that impacts your investing plan and the expected results.

Convetional Versus Portfolio Loans

Why is the difference between conventional financing and portfolio loans a big deal? We normally recommend getting conventional loans that are a full 30 year term and completely amortize over that 30 years. Amortizing means that the loan pays off over time. In the case of a 30 year fully amortizing loan that means that the loan will be completely paid off after 30 years if you make all your payments as agreed. We also recommend that you get loans with a fixed interest rate for the entire 30 year period. We do not typically recommend adjustable rate loans as they often open you up to additional risk of interest rates going up. Adjustable rate loans coupled with rising interest rates can devastate your cash flow on your rental Properties and turn what might have been a good rental Property into a nightmare rental Property with severe negative cash flow. Of course, you can model this with the The Real Estate Financial Planner™ software if you'd like to see it for yourself.

For most portfolio loans I have seen, the loans are usually 30 year term loans, but they are not fixed interest rates loans for the full 30 years. Instead, at least in our local market in Northern Colorado—and you will want to check with your local portfolio lenders to find out what their loan programs are if you're not in Northern Colorado—the loans tend to be a fixed interest rate for the first 5 years then the interest rates become variable. A variable interest rate like this gives you that interest rate risk I mentioned. If interest rates go up considerably, your monthly payment might increase, significantly crushing your cash flow. And, if interest rates have gone up causing you these cash flow problems, you won't be able to refinance them into a better loan at that point. The time to prevent the possible negative repercussions of rising interest rates with a variable rate loan is to lock in your loan now while interest rates are lower. Of course, if interest rates drop you can evaluate whether refinancing into even lower interest rates makes sense at that point.

With owner-occupant Nomad™ Properties that you are purchasing, moving into and then living in for a year before converting them to rentals, you are able to get more than 10 conventional, 30 year, fixed rate financing loans with just 5% down (provided you can qualify for them). Since you are moving into the Properties as your new primary residence each time, you are able to continue to get better financing with a lower interest rate, lower down payment and no interest rate risk like you'd get with a portfolio loan.

We go into a great amount of detail about financing your Properties in our related classes.

Additional Traditional Financing Resources

Beyond talking to your own lender, we have some pretty extensive additional resources for financing properties including financing owner-occupant Properties, Nomad™ Properties and other investment Properties. Here are some of the classes we have that go over the financing in detail.

Real Estate Investor Financing After Coronavirus Class Recording
https://app.RealEstateFinancialPlanner.com/real-estate-investor-financing-after-coronavirus/

Amazing Financing Strategies for Real Estate Investors Class Recording
https://app.RealEstateFinancialPlanner.com/amazing-financing-strategies-for-real-estate-investors/

Creative Financing Resources

Of course, this discussion of loan programs specifically ignores an entire discourse on buying Properties with creative financing like getting owner financing and buying subject to the existing financing. For more information on buying Properties creatively, you can access the following additional resources.

Creative Financing 101 Class Recording
https://app.RealEstateFinancialPlanner.com/creative-financing-101-2016-edition/

Owner Financing Class Recording
https://app.RealEstateFinancialPlanner.com/owner-financing-2016-edition/

Tyler, TX

This Property is modeled after Properties in Tyler, TX.Not all of our Scenarios or Blueprints™ are based on a specific city. Often, the Scenario is used to demonstrate a concept or investing strategy and is not based on a specific city. Other times, we may research the characteristics of Properties in a specific city and use those assumptions to model a Scenario.

In this particular Blueprint™, we are saying this Property is based on Properties in Tyler, TX. If you're from Tyler and think, "James is crazy: his assumptions are bonkers and in-credible (not at all credible)"... you don't have to raise your blood pressure... take a couple of deep breaths... breath in... breath out... and realize that you can just modify the assumptions using The Real Estate Financial Planner™ software and change them to better reflect your reality in Tyler, TX.

Purchase Price

In some real estate markets there are more buyers than sellers and sellers are fielding multiple offers on desirable Properties. We call this a seller's market.

In other markets, there are more sellers than buyers and sellers are competing to try to attract buyers to choose their Property. We call this a buyer's market.

The market conditions—and often just as importantly—the quality and attractiveness of the Property you're considering will determine whether you can make an offer to get a Property for less than the asking price and/or less than its current value or whether you might need to make an offer higher than asking price to overcome multiple offers from other buyers to get the Property.

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $216,276.03 and that it is worth $216,276.03. So, you're not getting the property at a discount at all and are paying full price.

If you find yourself in a market that is different than what we are modeling in this Scenario, you can use The Real Estate Financial Planner™ software to adjust our assumptions to model it more appropriately for what your market is and what you expect it to be in the future. Some folks will, and I believe justifiably so, model their personal plan for both a strong buyer's market in the future and then, change the assumptions to be for a strong seller's market. I believe you should know how your plan will perform in a variety of future market conditions to make sure you understand the pros and cons of a variety of what-if situations.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $10,813.80 as a down payment and that you'd be getting a loan for $205,462.23. The monthly payment on a $205,462.23 loan for 30 years at 6.5% would be $1,298.66 per month.

Closing Costs

Getting loans and closing on Properties have costs associated with them. We group all of these costs together into a single number that we call closing costs. Closing costs might include your share of title insurance, loan origination fees, points, closing services fees, flood certifications, appraisals and inspection costs.

For this Property we have assumed that the closing costs run about 1% of the $216,276.03 purchase price. 1% of $216,276.03 is approximately $2,162.76.

Seller Concessions

Sometimes we are able to negotiate with the seller to get them to contribute some money toward paying for our closing costs. When a seller contributes some money toward our closing costs we call these seller concessions.

The lender and, more often, the specific loan program you choose will regulate how much in seller concessions you can get and what it can be used for. In most cases, seller concessions can be used for things like buyer's closing costs, loan discount points, loan origination fees, prepaid items and any other fee, cost, charge, expense or expenditure. You cannot typically use seller concessions to pay for any of your down payment. You will need to come up with the entire $10,813.80 for down payment from your own funds.

In some areas if you don't use the seller concessions you've negotiated in your contact, any unused amounts revert to the seller. It is based on how the contract is written. This is the case in Colorado with the default wording of the Colorado Real Estate Commission approved Contract to Buy and Sell Real Estate. Just make sure you can use all the seller concessions you negotiate with your lender before writing and submitting your offer to the seller.

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

Sometimes when we buy a Property, it is not in rent-ready condition. Sometimes a Property will require you spend some money to prepare a Property to be able to be move-in ready. We call this expense rent ready costs.

While it can be difficult to achieve this, my preferred method of purchasing Properties is to buy Properties that have little or no rent ready costs. By minimizing your rent ready costs it reduces the amount of capital required to purchase the Property beyond the down payment and closing costs. Once we optimize our down payment and closing costs by choosing great team members, rent ready costs are one of the few additional variables that we have control over through Property selection to minimize our initial overall investment with acquiring Properties.

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

For Properties you are renting, you get tax benefits known as depreciation. Depreciation varies depending on whether you have a residential Property or commercial Property. Residential Properties are depreciated over 27.5 years while commercial Properties are depreciated over 39 years.

Since depreciation can reduce the amount you spend on taxes, and that means more money in your pocket, we can consider the after-tax impact of your depreciation as a form of spendable cash flow. As we buy more expensive Properties the cash flow from depreciation increases as well.

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For each Property, The Real Estate Financial Planner™ software allows us to select which Account we will use for down payment and expenses of purchasing the Property. Plus, we can select which Account we will use for depositing income from the Property like rent and subtract the expenses for the Property like the mortgage payment.

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

Appreciation is the tendency for Property values to go up over time. Property values can go up, go down or stay the same, but historically, over a long period of time, Property values tend to go up.

Want to learn more than you really ever wanted to know about appreciation? Great news! I taught a whole class on building wealth from appreciation on rental Properties; check it out below.

Understanding Appreciation Class Recording
https://app.RealEstateFinancialPlanner.com/understanding-appreciation-nomad-investor-club-edition/

Cash Flow Versus Appreciation Class Recording
https://app.RealEstateFinancialPlanner.com/cash-flow-versus-appreciation/

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

We will explain the Rules in more detail in just a bit, however, I would like to show you which Rules do apply to the Typical Tyler, Texas Nomad™ Property Property and give you some very basic information about what each Rule does.

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jun 2029 (Month 52) for $222,764.31 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $222,764.31 and that it is worth $222,764.31. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $11,138.22 as a down payment and that you'd be getting a loan for $211,626.09. The monthly payment on a $211,626.09 loan for 30 years at 6.5% would be $1,337.62 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $222,764.31 purchase price. 1% of $222,764.31 is approximately $2,227.64.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Aug 2030 (Month 66) for $230,580.39 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $230,580.39 and that it is worth $230,580.39. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $11,529.02 as a down payment and that you'd be getting a loan for $219,051.37. The monthly payment on a $219,051.37 loan for 30 years at 6.5% would be $1,384.55 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $230,580.39 purchase price. 1% of $230,580.39 is approximately $2,305.80.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2032 (Month 83) for $240,440.95 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $240,440.95 and that it is worth $240,440.95. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $12,022.05 as a down payment and that you'd be getting a loan for $228,418.90. The monthly payment on a $228,418.90 loan for 30 years at 6.5% would be $1,443.76 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $240,440.95 purchase price. 1% of $240,440.95 is approximately $2,404.41.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2033 (Month 95) for $247,654.18 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $247,654.18 and that it is worth $247,654.18. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $12,382.71 as a down payment and that you'd be getting a loan for $235,271.47. The monthly payment on a $235,271.47 loan for 30 years at 6.5% would be $1,487.08 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $247,654.18 purchase price. 1% of $247,654.18 is approximately $2,476.54.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2034 (Month 107) for $255,083.81 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $255,083.81 and that it is worth $255,083.81. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $12,754.19 as a down payment and that you'd be getting a loan for $242,329.62. The monthly payment on a $242,329.62 loan for 30 years at 6.5% would be $1,531.69 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $255,083.81 purchase price. 1% of $255,083.81 is approximately $2,550.84.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2035 (Month 119) for $262,736.32 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $262,736.32 and that it is worth $262,736.32. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $13,136.82 as a down payment and that you'd be getting a loan for $249,599.50. The monthly payment on a $249,599.50 loan for 30 years at 6.5% would be $1,577.64 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $262,736.32 purchase price. 1% of $262,736.32 is approximately $2,627.36.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2036 (Month 131) for $270,618.41 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $270,618.41 and that it is worth $270,618.41. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $13,530.92 as a down payment and that you'd be getting a loan for $257,087.49. The monthly payment on a $257,087.49 loan for 30 years at 6.5% would be $1,624.97 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $270,618.41 purchase price. 1% of $270,618.41 is approximately $2,706.18.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2037 (Month 143) for $278,736.96 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $278,736.96 and that it is worth $278,736.96. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $13,936.85 as a down payment and that you'd be getting a loan for $264,800.11. The monthly payment on a $264,800.11 loan for 30 years at 6.5% would be $1,673.72 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $278,736.96 purchase price. 1% of $278,736.96 is approximately $2,787.37.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Typical Tyler, Texas Nomad™ Property Property
Purchased in Jan 2038 (Month 155) for $287,099.07 as a Nomad™

The Typical Tyler, Texas Nomad™ Property Property is a Dynamic Property. In addition to this Property being a Dynamic Property it is also a Nomad™ Property.

Tyler, TX

This Property is modeled after Properties in Tyler, TX.

Purchase Price

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming you are purchasing the Property for $287,099.07 and that it is worth $287,099.07. So, you're not getting the property at a discount at all and are paying full price.

Initial Loan

We have assumed that you're able to get a 30 year (360 month) loan on this Property at an interest rate of 6.5% with 5% down payment. That means you'd need to come up with $14,354.95 as a down payment and that you'd be getting a loan for $272,744.12. The monthly payment on a $272,744.12 loan for 30 years at 6.5% would be $1,723.93 per month.

Closing Costs

For this Property we have assumed that the closing costs run about 1% of the $287,099.07 purchase price. 1% of $287,099.07 is approximately $2,870.99.

Seller Concessions

You were unable to get the seller to contribute any money in seller concessions for this Property.

Rent Ready Costs

For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that it is already in rent ready condition and it does not require any additional work or money.

Depreciation

Since this Property is a residential Property, we can depreciate the value of the building (excluding the value of the land) over 27.5 years.

Accounts for the Typical Tyler, Texas Nomad™ Property Property

For this Property, we are using the same Account for both the purchase and operating income and expenses: the All-In-One Account Earning 7%/year Account.

Appreciation

With The Real Estate Financial Planner™ software, we can set what our expectation is for the rate at which the Property value increases over time. For the Typical Tyler, Texas Nomad™ Property Property, we are assuming that Property values are going up at a rate of 3% per year.

Rent and Rent Appreciation Rate

If we bought this Property and rented it right away, we'd be getting $0 per month in rent. However, since this is a Nomad™ Property, we are buying the Property and moving in to the Property so we will not be collecting rent right away.

Over time, rents tend to go up (just like Property values). The Real Estate Financial Planner™ software allows us to specify at what rate the rents are going up each year. For this Property we have assumed that rents are going up at a rate of 3% per year.

Buy Property When Account Has Down Payment

This Rule for this Property runs for the entire Scenario.

With the Buy Property When Account Has Down Payment, we buy a version of the Typical Tyler, Texas Nomad™ Property Property when the All-In-One Account Earning 7%/year Account has enough to cover the total cost to close (which includes any down payment and closing costs) required to make the purchase of the Property.

We do limit the number of copies of the Typical Tyler, Texas Nomad™ Property Property that we can buy using this Rule to 10 total.

Summary of Properties

The following table summarizes the number of Properties that we buy in this Scenario so you can quickly see when each Property has been purchased and, if applicable, sold.

Address/Description Bought/Sold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 1 Jun 2028 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 2 Jun 2029 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 3 Aug 2030 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 4 Jan 2032 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 5 Jan 2033 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 6 Jan 2034 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 7 Jan 2035 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 8 Jan 2036 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 9 Jan 2037 Hold
Dynamic Nomad™ Typical Tyler, Texas Nomad™ Property 10 Jan 2038 Hold

Again, when we say a Property is Dynamic that means that the Property was based on a template of a Property that we could have bought multiple copies of.

Nomad™ Properties are a special type of Property where we move into them at time of purchase and typically don't collect rent on the Properties when we first buy. Once we buy another Nomad™ Property, we convert the previous Nomad™ Property that we bought and are living in to a rental; we would then start collecting rent on the Nomad™ Property we just moved out of.

When a Property does not have a sale date and instead says Hold, that means that we never end up selling the Property. Instead, we keep it for the entire duration of the Scenario and never sell it.

The following is a graphical summary of the number of Properties we've purchased and when they were bought. It shows the number of Properties owned on the vertical axis and time in the form of number of months into the Scenario on the horizontal axis.

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