Book questions: Real Estate by the Numbers - Dave Meyer, J Scott
Hello,
I just purchased the new book by Dave Meyer and J Scott; “Real Estate by the Numbers”. So far it is a great book!
I am trying to figure out how J and Dave got to $65,000 in the following section (I am reading the eBook version so page numbers won't correspond with the physical book): Towards the end of Chapter 2; "Finally, notice that the owner equity in this business totals about $65,000; because John is sole owner of the business, that $65,000 is the value that John transfers to his PFS and can claim as his ownership value in the company.”
Everything up to this point was clearly explained on how they got to the number, except this $65,000. Can someone please provide some clarity?
Thank you very much for your help!
Cheers,
Henry
I just started this same chapter but skimmed ahead to see what you’re referring to. You pose a good question.
It looks like the “about $65,000” that’s being transferred to John’s PFS could have been calculated by adding the $8,450 Tenant Security Deposits to the $56,541 Total Owner Equity, for a total of $64,991. However, since the TSD’s have to be paid back, that doesn’t seem like that would be right. Unless maybe because he has those funds in his business account it’s considered an asset on his PFS until he has to pay it back?
Sorry I couldn’t answer it definitively, but it’s an interesting question, Henry.
Hello Pam,
Thanks for replying! We are in agreement; I don't think you can count the Tenant Security Deposit of $8,450 towards Owners Equity.
So the mystery still stands! How did they get to the $65,000 in Owners Equity?
@Dave Meyer @J Scott - we've got a burning Real Estate by the Numbers question for one of you two!
Quote from @Henry Dossantos:
Hello,
I just purchased the new book by Dave Meyer and J Scott; “Real Estate by the Numbers”. So far it is a great book!
I am trying to figure out how J and Dave got to $65,000 in the following section (I am reading the eBook version so page numbers won't correspond with the physical book): Towards the end of Chapter 2; "Finally, notice that the owner equity in this business totals about $65,000; because John is sole owner of the business, that $65,000 is the value that John transfers to his PFS and can claim as his ownership value in the company.”
Everything up to this point was clearly explained on how they got to the number, except this $65,000. Can someone please provide some clarity?
Thank you very much for your help!
Cheers,
Henry
Came here to ask this! I’m fairly certain it’s a typo that got replicated somewhere in the editing process (“find and replace” fail?) and should simply be 56,000
Thank you for posting the same question! Let's hope we can have Mr. Meyer or Mr. Scott provide us with an update. I have found three little typos so far. I just finished Chapter 3.
Hey Asher -- yes this has been pointed out to us. We apologize for the mistake -- this was missed in the editing process. The table in the book does not match the text. We're working on updating it for the next printing, and we'll get a PDF copy out to those of you who already have the book. Sorry about that! We hope to have an updated PDF in the coming days.
Thanks Dave! Appreciate the clarification
Hello,
How will we know once the updated eBook is out? Will BiggerPockets notify us?
RE by the numbers spreadsheet question. I love the detailed spreadsheet that came with the book. I have been using it to analyze potential deals. I also put in two properties that I own, one has 18 years left on a 20yr fixed and the other has been paid off in cash. The calculator does not really handle the calculations well for these scenarios. I entered "1" for the mortgage on the property that is paid off and I entered "1" at year 19 for the property with 18 years because it did not calculate it even though I entered 18 in the Financing Assumptions box. Is there a better way to handle this? It may be a mute point but I was trying to decide whether to sell or hold and rent and wanted to see the projections at 10-20 years. Is there a better way to run buy and hold calculations for a property that has been paid off completely?
I am listening the audiobook but I cannot find the link to follow along. Does anyone have the link for pdfs so I can follow along?
Hello John,
The files/pdfs were on the download page for the eBook. Not sure what your download screen looked like but you might want to check there. Good luck.
Can someone please help me? I can’t get the same answer that was in the book.
For the ““HONE YOUR SKILLS: CHAPTER 7” the answer in the book does not make sense. When I ran the numbers I got a different answer. When I ran it through ChatGPT, I got the same answer that I came up with. Is the answer in the book wrong? Help!
Here is the question:
“You’re investing $10,000 in a deal that has three potential outcomes: 20 percent chance of tripling your money, 45 percent chance of breaking even, 35 percent chance of losing all your money. What is your expected value for this investment?”
The answer in the book is : $500
My answer (and ChatGBT’s) is : $2,500
What is the correct answer?
