+ Reply to Thread
Results 1 to 40 of 40

Equity buildup calculation

  1. #1
    Forum Contributor
    Join Date
    11-17-2004
    MS-Off Ver
    Office 2016
    Posts
    523

    Equity buildup calculation

    I am trying to duplicate the results found on a real estate website that shows the equity buildup over a period of 20 years based on purchasing a $200,000 property every two years which appreciates at 5% with a 10% down payment. Every 2 years you would take an equity loan of $20,000 from the previous property to purchase the next. The calculation also seems to take into account the amount of equity gained by paying down the loan. The numbers that are used in the calculation are:
    Please Login or Register  to view this content.
    The results of the calculation are:
    Please Login or Register  to view this content.
    Iím no expert at real estate formulas but I do think of myself as pretty good at it and Iíve written a number of formulas and calculations that prove out certain theoretical returns but this one has me stumped. The website itself is http://www.taxloopholes.com/PUBRealE...lculate=y#calc

  2. #2
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  3. #3
    Forum Contributor
    Join Date
    11-17-2004
    MS-Off Ver
    Office 2016
    Posts
    523
    Sure we will if we keep in mind that as an investment property the calculation assumes that all mortgage costs are paid for by a renter, so all interest paid is not deducted from the value but all principal is added in.

    For instance, the $200k home, appreciating at 5% we will have gained $10,000 in value and the principal paid on the loan will have added in roughly $2k the first year. But although the interest is about $11.5k it is not subtracted from the equity of our holdings since it was not paid by us.

  4. #4
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  5. #5
    Forum Contributor
    Join Date
    11-17-2004
    MS-Off Ver
    Office 2016
    Posts
    523
    Sure we will if we keep in mind that as an investment property the calculation assumes that all mortgage costs are paid for by a renter, so all interest paid is not deducted from the value but all principal is added in.

    For instance, the $200k home, appreciating at 5% we will have gained $10,000 in value and the principal paid on the loan will have added in roughly $2k the first year. But although the interest is about $11.5k it is not subtracted from the equity of our holdings since it was not paid by us.

  6. #6
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  7. #7
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  8. #8
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  9. #9
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  10. #10
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  11. #11
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  12. #12
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  13. #13
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  14. #14
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  15. #15
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  16. #16
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  17. #17
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  18. #18
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  19. #19
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  20. #20
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  21. #21
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  22. #22
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  23. #23
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  24. #24
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  25. #25
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  26. #26
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  27. #27
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  28. #28
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  29. #29
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  30. #30
    Forum Contributor
    Join Date
    11-17-2004
    MS-Off Ver
    Office 2016
    Posts
    523
    The answer was so obvious that I could not see it. I appear to have been calculating the reduction of principal but then not adding in the appreciation.

    I thank you for your kind response...

  31. #31
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  32. #32
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  33. #33
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  34. #34
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  35. #35
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  36. #36
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  37. #37
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  38. #38
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




  39. #39
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    This doesn't make sense on the face of it. If your property is appreciating
    at 5% and you are paying 7% interest on 90% of its value, you are not going
    to make any money or build up any equity.

    --

    Vasant


    "JimDandy" <JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmjyn_1123805145.3979@excelforum-nospam.com...
    >
    > I am trying to duplicate the results found on a real estate website that
    > shows the equity buildup over a period of 20 years based on purchasing a
    > $200,000 property every two years which appreciates at 5% with a 10%
    > down payment. Every 2 years you would take an equity loan of $20,000
    > from the previous property to purchase the next. The calculation also
    > seems to take into account the amount of equity gained by paying down
    > the loan. The numbers that are used in the calculation are:
    >
    > Code:
    > --------------------
    >
    > 200000 Initial value
    > 5 % Rate of growth
    > 7 % Annual interest rate
    > 10 % Down payment
    > 0 % Misc. expenses, ie closing, fixing, holding
    > 20000 Total investment
    > 2 Number of years between reinvestments
    > --------------------
    >
    > The results of the calculation are:
    > Code:
    > --------------------
    >
    > Results
    > Time years Net Equity
    >
    > 2 $44,289.09
    > 4 $98,076.20
    > 6 $217,185.30
    > 8 $480,947.01
    > 10 $1,065,035.38
    > 12 $2,358,472.64
    > 14 $5,222,730.91
    > 16 $11,565,501.21
    > 18 $25,611,278.93
    > 20 $56,715,017.95
    > --------------------
    >
    > I'm no expert at real estate formulas but I do think of myself as
    > pretty good at it and I've written a number of formulas and
    > calculations that prove out certain theoretical returns but this one
    > has me stumped. The website itself is
    > http://www.taxloopholes.com/PUBRealE...lculate=y#calc
    >
    >
    > --
    > JimDandy
    > ------------------------------------------------------------------------
    > JimDandy's Profile:
    > http://www.excelforum.com/member.php...o&userid=16578
    > View this thread: http://www.excelforum.com/showthread...hreadid=395192
    >




  40. #40
    Vasant Nanavati
    Guest

    Re: Equity buildup calculation

    "JimDandy" <JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com> wrote in
    message news:JimDandy.1tmpic_1123812329.1159@excelforum-nospam.com...
    >
    > Sure we will if we keep in mind that as an investment property the
    > calculation assumes that all mortgage costs are paid for by a renter,
    > so all interest paid is not deducted from the value but all principal
    > is added in.


    OK, that was not stated anywhere in the OP. And then are we assuming a
    30-year conventional mortgage?

    In any event, in that case it's quite simple. Over 24 months, the principal
    paydown is $3,789.09, the appreciation is $20,500.00, and the original
    investment is $20,000.00 for a total equity at the end of 2 years of
    $44,289.09. You just build from there.

    --

    Vasant




+ Reply to Thread

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

Search Engine Friendly URLs by vBSEO 3.6.0 RC 1