All Forum Posts by: Daniel Alvarez

I checked the interest payments and yes they go up around around a refi, which tells me it's fine. Also when a refi is done mid year you see an annual increase across two years as the full annual amount catches up. Switching refis off in cells G79 and H79 shows this.

Btw I did noticed the model doesn't display well when clicking the link, and it doesn't work in google sheets so I'll look into that. I guess right now only Excel will show it correctly.

@Patrick Liska certainly growth rates can be input yearly for the key revenue and cost lines. The key one for me is whether it makes sense to drop in some “correction” rates (i.e. negative growth) or if in the end it all evens out long term as @Kerry Baird writes...

@Kyle M. Good point. The model also has a section for monthly “actuals”, which when filled out (even zero) they will override any calculations. This helps track past performance and calibrate future assumptions if I need to (and hopefully simplify tax time). Certainly sometimes simpler IS better, just depends what questions you want answered.

Once I decide if a cash-out refi is the way forward I will need to spend a lot more time looking for deals. That’s definitely the way to go! Then if time allows I’d also like to add each property in a separate tab and maybe create a dashboard showing the full portfolio. Shouldn’t take me much time and I’m thinking this will also help look at the combined accumulated losses and assist financial planning.

If you don’t mind me asking, do you have specific tools you use for finding deals?

I once downloaded and analyzed Zillow data to find markets with attractive cap rates...

@Patrick Liska thanks I will take a look. I agree interest payments should only go up if there’s a refi.

When it comes to all the cost and growth assumptions one thing I lack is the experience to understand what to expect... so most long term inputs are educated guesses.

What the model does help with then is understanding which ones are my returns most sensitive to. So far it’s mostly common sense, e.g. rent increases really make a difference...

@Kerry Baird thank you for the perspective!

Often I’m easily cursed with information overload around investment decisions - I find it’s easier to let the analytical mind take over, so I have to work harder at letting my “gut” chime in.

When the brain takes over I find myself troubled with more questions than answers, one reason I decided to build the model. Experience with models tells me they’re great confidence building tools, but never a good replacement for common sense - and the wisdom of experience. So I much appreciate the perspective.

Would you say there is a trade off of going wide vs going deep or is it just a matter of personal preference? It feels going deep is less risky, which I like, but are returns lower to match the lesser risk...

I've been ruminating over the low rate environment recently and whether to refi one or more of my long-term rentals, but I just struggled visualizing the full gamut of financial impacts, e.g. loan cost inefficiency, 30yrs vs 15yrs mortgages, maximizing cash flows vs cash-outs, tax positions, etc. Personally a cash-out refi could help me get more quickly into all-cash BRRRs or a REI venture in Spain, however I don't know to what extent this is at the expense of rental cash flows, and what is the wiser decision long term.

I've combed through posts online and looked for Excel templates to run some calcs and get a sense, but nothing really filled the void... 

So having some financial modeling background I could not resist any longer. This past week I've invested some hours after my 9 to 5 (between putting the babies to bed and my own bedtime) into a tool that would help me understand the impact of refinancing, depreciating or selling my LTRs. Of course it quickly snowballed so the result so far is a comprehensive, detailed model that captures quite a wide gamut of financial variables. Not shy to admit perhaps too detailed. Next I intend to cross check the calculations (esp. taxes) and simplify the layout. Also currently it just caters for LTRs.

If you can go past the level of detail I would love to hear any feedback from anyone interested, and especially from any Excel gurus, accountants, investors or tax experts out there with a keen eye. I'd love your suggestions, criticisms and comments and I'm happy to address questions as well. I'm an avid reader of BP but I'm also a self-taught investor like many of us here, barely 3 yrs deep into REI, so I'm certain blunders abound. In the least I hope the model is helpful to others, as a start if anything - just like I was searching for before this week.

Reader beware : model is not for the fainthearted. I've seen some simple templates circulating the internet and this is nothing alike.

Link below, there is no pwd on the file but the structure is protected :

https://drive.google.com/open?id=15ehUtK-JkK0px-S5IUxSaLwZSUrwNjSN

PS :  a key standout for me using the model has been the power of cash-out refis. Simply switching the right refis on or off you can see NOLs accumulate or deplete and the impact on returns. As with any model the motto "garbage-in, garbage-out" stands, so more detail often means harder to use and less accurate. Always question what you see and don't take anything for granted. Also the customary caveat, I'm not an expert or adviser of any kind so use at your own risk (and peril).

Sounds great, I will be in LP later this month. If you're around I'd love to connect.

@Mike Lambert Excellent! DR is a great place, and Dominicans are fantastic. I pretty much drove the eastern half 4 years ago. I’m back in Montreal next week as well (from the Canary Islands), I can send you a PM then to tee something up?

@Mike Lambert

I’m temporarily in Montreal on work assignment and would love to get you a coffee one day and pick your brain! I’m relatively new to RE investing but have found myself to be quite passionate about it!

@Shane Pearlman

Post is a bit old now but I’m also looking at this market with a keen eye (was born here). What are your interests exactly?