Inspired by my meetings with Bob Rogers, I decided to do my own numbers for the properties. I wanted to see if there was any appeal to taking Bob Rogers’ advice and buying more properties instead of paying them off. Here we go!
• Annual Profits with mortgage is based on Total Rents minus Yearly Mortgage and Repairs (and Utilities if applicable)
• Annual Profits without mortgage is based on Total Rents minus Taxes, Insurance, and Repairs (and Utilities if applicable)
Property 1 (2 Units)
Price at Purchase: $74,000
Total Rents: $16,800
Taxes: $4,156
Insurance: $1,170
Repairs: $3,000
Utilities: $2,391
Net Annual Profit with mortgage: $1,089
Net Annual Profit without mortgage: $6,083
Property 2 (2 Units)
Price at Purchase: $59,000
Total Rents: $15,960
Taxes: $3,374
Insurance: $1,016
Repairs: $3,000
Net Annual Profit with mortgage: $3,636
Net Annual Profit without mortgage: $8,570
Property 3 (4 Units)
Price at Purchase: $60,000
Total Rents: $23,880
Taxes: $3,598
Insurance: $2,698
Repairs: $3,000
Utilities: $4,286
Net Annual Profit with mortgage: $6,574
Net Annual Profit without mortgage: $10,298
Proposed Property 4 (PP4 #7 - 2 Units)
Price at Purchase: $46,000
Total Rents: $15,600
Taxes: $3,691
Insurance: $1,200
Repairs: $3,000
Net Annual Profit with mortgage: $4,800
Net Annual Profit without mortgage: $7,709
Proposed Property 5 (PP4 #5 - 2 Units)
Price at Purchase: $77,500
Total Rents: $16,800
Taxes: $3,000
Insurance: $1,200
Repairs: $3,000
Net Annual Profit with mortgage: $4,476
Net Annual Profit without mortgage: $9,600
Overall Stats
$89,000 total rents collected
$20,575 Net Income with Mortgages
$42,260 Net Income without Mortgages
I put all the repairs at $3000, but that’s an overestimate. Last year, for example, Property 1 cost $700 in repairs. Looking at these numbers, though, I think it’s a no-brainer to pay off the mortgages. I mean, think about it: $89,000 before taxes, $42,260 after taxes, and I’ll still be able to save $25,000 a year towards future property purchases. And I do all this with only 12 sets of tenants, which means less work for me. That’s awesome! But let’s delve into the future and look at the personal expenses for a moment.
I told Bob Rogers that I need $1,500 for living expenses, right? Okay, let’s break the monthly expenses down:
Food: $400
Cellphone: $70
Gas: $200
Cable Internet: $50
Car Insurance: $70 (car will be paid off by then, so no car payments and lower insurance)
That’s it, and let’s remember that these are overestimates. The total comes out to $790, leaving me with $710 of “in-case-shit-happens” money every month.
I like these numbers and, even though they’re rough estimates, it’s a relief to see actual numbers added to my future plans. Bob Rogers inspired this, so I have him to thank for pushing me to do my own numbers. I brought these figures to him the other day and he said the estimates were legit. Sweet! Now I just have to wait to see what happens. June 17th. Exactly one week from today is when I can bid on PP4 #7. If I can get that, then buy PP4 #5 in October, then I’m all set and the payoff bonanza can begin.
P.S.: I just noticed something. Both the proposed purchases I’m doing are two units each… four altogether. If I find ONE four-unit property for the combined price ($123,500), I’ll be paying a hell of a lot less for repairs, insurance, and taxes. I didn’t notice this until just now. I’ll keep my eyes out for any 4-unit properties with finished attics until the 17th.
• Annual Profits with mortgage is based on Total Rents minus Yearly Mortgage and Repairs (and Utilities if applicable)
• Annual Profits without mortgage is based on Total Rents minus Taxes, Insurance, and Repairs (and Utilities if applicable)
Property 1 (2 Units)
Price at Purchase: $74,000
Total Rents: $16,800
Taxes: $4,156
Insurance: $1,170
Repairs: $3,000
Utilities: $2,391
Net Annual Profit with mortgage: $1,089
Net Annual Profit without mortgage: $6,083
Property 2 (2 Units)
Price at Purchase: $59,000
Total Rents: $15,960
Taxes: $3,374
Insurance: $1,016
Repairs: $3,000
Net Annual Profit with mortgage: $3,636
Net Annual Profit without mortgage: $8,570
Property 3 (4 Units)
Price at Purchase: $60,000
Total Rents: $23,880
Taxes: $3,598
Insurance: $2,698
Repairs: $3,000
Utilities: $4,286
Net Annual Profit with mortgage: $6,574
Net Annual Profit without mortgage: $10,298
Proposed Property 4 (PP4 #7 - 2 Units)
Price at Purchase: $46,000
Total Rents: $15,600
Taxes: $3,691
Insurance: $1,200
Repairs: $3,000
Net Annual Profit with mortgage: $4,800
Net Annual Profit without mortgage: $7,709
Proposed Property 5 (PP4 #5 - 2 Units)
Price at Purchase: $77,500
Total Rents: $16,800
Taxes: $3,000
Insurance: $1,200
Repairs: $3,000
Net Annual Profit with mortgage: $4,476
Net Annual Profit without mortgage: $9,600
Overall Stats
$89,000 total rents collected
$20,575 Net Income with Mortgages
$42,260 Net Income without Mortgages
I put all the repairs at $3000, but that’s an overestimate. Last year, for example, Property 1 cost $700 in repairs. Looking at these numbers, though, I think it’s a no-brainer to pay off the mortgages. I mean, think about it: $89,000 before taxes, $42,260 after taxes, and I’ll still be able to save $25,000 a year towards future property purchases. And I do all this with only 12 sets of tenants, which means less work for me. That’s awesome! But let’s delve into the future and look at the personal expenses for a moment.
I told Bob Rogers that I need $1,500 for living expenses, right? Okay, let’s break the monthly expenses down:
Food: $400
Cellphone: $70
Gas: $200
Cable Internet: $50
Car Insurance: $70 (car will be paid off by then, so no car payments and lower insurance)
That’s it, and let’s remember that these are overestimates. The total comes out to $790, leaving me with $710 of “in-case-shit-happens” money every month.
I like these numbers and, even though they’re rough estimates, it’s a relief to see actual numbers added to my future plans. Bob Rogers inspired this, so I have him to thank for pushing me to do my own numbers. I brought these figures to him the other day and he said the estimates were legit. Sweet! Now I just have to wait to see what happens. June 17th. Exactly one week from today is when I can bid on PP4 #7. If I can get that, then buy PP4 #5 in October, then I’m all set and the payoff bonanza can begin.
P.S.: I just noticed something. Both the proposed purchases I’m doing are two units each… four altogether. If I find ONE four-unit property for the combined price ($123,500), I’ll be paying a hell of a lot less for repairs, insurance, and taxes. I didn’t notice this until just now. I’ll keep my eyes out for any 4-unit properties with finished attics until the 17th.
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