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04 1 5% Down Primary Then 9 25% Down Rental Properties

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

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

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Scenario

• Modeled for 1200 months (100 years)
• 20% effective income tax rate
• 3% inflation rate
• 6.5% mortgage interest rate
• 4% yearly safe withdrawal rate (SWR)
• $5,000 minimum target monthly income in retirement (MTMIR) in today's dollars
• $8,000 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 Account Earning 7%/year
• $10,000 starting account balance
• 7% yearly rate of return (at start)
• Asset Type: Stocks

Properties

Summary of assumptions for Properties in this Scenario (at the start of the Scenario).

Property Address/Description: Typical 25% Down Payment Montgomery, Alabama Rental Property

• Montgomery, AL
• 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 Account Earning 7%/year
• $114,489 property value and purchase price and it goes up at a rate of 3% per year.
• 25% of purchase price for down payment.
• 1% of purchase price in closing costs at time of purchase.
• No seller concessions.
• 6.75% is the mortgage interest rate with a term of 360 month mortgage term.
• $1,254.75 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.
• 0.417% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $114,489 that's about $477.42 per year in property taxes at the start and it changes as the property value changes.
• 1.958% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $114,489 that's about $2,241.69 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: Typical Montgomery, Alabama Nomad™ Property

• Montgomery, AL
• 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 Account Earning 7%/year
• $114,489 property value and purchase price and it goes up at a rate of 3% per year.
• 5% of purchase price for down payment.
• 1% of purchase price in closing costs at time of purchase.
• No seller concessions.
• 6.5% is the mortgage interest rate with a term of 360 month mortgage term.
• Private Mortgage Insurance (PMI) at a rate of 0.85% of the initial loan balance until the loan-to-value drops below 80%.
• $1,254.75 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.
• 0.417% of the value of the property each year is the assumed property taxes rate. Based on the initial value of $114,489 that's about $477.42 per year in property taxes at the start and it changes as the property value changes.
• 1.958% of the value of the property each year is the assumed property insurance rate. Based on the initial value of $114,489 that's about $2,241.69 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.

Buy Property When Account Has Down Payment - Buying 1 Owner-Occupant Montgomery, Alabama Property

• This  Rule runs for the entire  Scenario.
• This  Rule will buy another copy of the Dynamic (template property) Typical Montgomery, Alabama Nomad™ Property whenever  All-In-One Account Earning 7%/year has enough for down payment and closing costs...
• Plus at least 6 months of reserves for the property we're buying
• Plus at least 6 months of reserves for all personal expenses
• Plus at least 6 months of reserves for all other  Properties owned
• This  Rule requires that with the purchase of the property with this  Rule that Debt-To-Income ratio remains below 45%.
• This  Rule will only buy 1  Properties maximum. But if you sell any, it will try to buy more to replace them.

Buy Property When Account Has Down Payment - Buying 9 Non-Owner-Occupant 25% Down Payment Montgomery, Alabama Rental Properties

• This  Rule runs for the entire  Scenario.
• This  Rule will buy another copy of the Dynamic (template property) Typical 25% Down Payment Montgomery, Alabama Rental Property whenever  All-In-One Account Earning 7%/year has enough for down payment and closing costs...
• Plus at least 6 months of reserves for the property we're buying
• Plus at least 6 months of reserves for all personal expenses
• Plus at least 6 months of reserves for all other  Properties owned
• This  Rule requires that with the purchase of the property with this  Rule that Debt-To-Income ratio remains below 45%.
• This  Rule will only buy 9  Properties maximum. But if you sell any, it will try to buy more to replace them.

Paycheck and Personal Expenses - Paycheck From Job and Personal Expenses Saving $1,000 Per Month

• This  Rule runs for the entire  Scenario.
• Depositing both your paycheck and pulling expenses out of the same  All-In-One Account Earning 7%/year.
• Both paycheck and personal expenses will be Inflation Adjusted.
• Gross paycheck is $5,000 Inflation Adjusted.
• Assuming a tax rate of 20% on your paycheck.
• Net paycheck (after taxes) is $4,000 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 $3,000 Inflation Adjusted per month.

Significant Events

These are the  Significant Events for this Scenario.

• Month 20  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 39  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 73  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 85  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 96  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 105  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 113  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 121  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 127  Bought New Dynamic Property Based On Rule Buy Property When Account Has Down Payment
• Month 177  Achieved Financial Independence Goal
• Month 309  Achieved Ideal Financial Independence Goal
• Month 380  Paid Off Mortgage
• Month 399  Paid Off Mortgage
• Month 418  Paid Off Mortgage
• Month 433  Paid Off Mortgage
• Month 445  Paid Off Mortgage
• Month 456  Paid Off Mortgage
• Month 465  Paid Off Mortgage
• Month 465  Achieved 2 X Ideal Financial Independence Goal
• Month 473  Paid Off Mortgage
• Month 481  Paid Off Mortgage
• Month 487  Paid Off Mortgage