Spreadsheet for Low DTI, small but mighty

[Chester Davis]

Hello colleagues, 

The question: 

Does anyone have a resource, chart or best an excel spreadsheet function which explores the relationships of future cash flow goals, time horizon and DTI, perhaps oriented toward someone looking to the small but mighty perspective?

The reason: 

The biggest elements of getting my wife’s enthusiastic mutual agreement is:

A. Having a clear plan showing a variety of “if bad things happen” scenarios plotted out (economic woes, bad tenants, unexpected expenses) 

B. Keeping a low level of risk; low DTI, diversified risk, etc but I think primarily it is solving the question "if something bad happens can we carry the property and for how long?".

to further these objectives I am planning to start the acquisition process as "cash only" plus some forced appreciation, put into LTR or managed MTR, establish records and build a very healthy reserve account attached to the property, refinance with low DTI to pull some equity for next acquisition.
i started building a spreadsheet but thought “I know I am not the only one, why reinvent the wheel without reason?”, I’m sure that someone already has done it and might be willing to share.

Thank you all. 

Chet Davis

Projects4Missions.com

[Carini Rochester]

@Chester Davis Nice well written and well thought out goals and objectives! "getting my wife's enthusiastic mutual agreement" I love it! No, I don't have a chart or a spreadsheet. I have just one comment. You want to start "cash only." I'm not completely sure what you mean by that, but reading between the lines I'm thinking that you mean that you will use no debt (You will pay, up front, 100% of the purchase price. You will not have a mortgage.) The layman, the non-investor, has the (incorrect) impression that this strategy is synonymous with "low risk." There are many posts on this site where people more knowledgeable than me explain the error in that thinking. Search out those posts. Basically the thinking goes that you are only risking the money you put into it. If you buy a $200,000 property at 20% down, you are only risking $40,000, the bank is risking the other $160,000. The lower the down payment, the lower the risk. Risk is mitigated, in my opinion, by excellent tenant selection, and vigilant tenant control. I'm not sure how you put that into your spreadsheet. Your plan of pulling equity for the next acquisition (a down payment, I presume) is a great way to get a future down payment, however, this will likely take years, 5 to 7 years, I would think. BRRRR is a great way to force appreciation and get you your next down payment quickly. (Recycle the money!) My experience has been that 20% down payments, mortgages, buying the right properties, selecting good tenants, has been very low risk. One other suggestion for getting the wife's support, include a line on the spreadsheet that shows an amount per month, or every 6 months, . . . shows an amount of money she can pull out and spend however she wants! Wish you well.