01
Income Over Time — All 4 Units MTR
Core Projection
Four furnished units at $2,800/month base, 85% occupancy, rent grows 3.5% annually.
Gross income in Year 1: $114,240. Year 5: $135,640.
Year 10: $161,140. Year 20: $228,090. Year 30: $322,610.
30-year cumulative gross: $3.4M+ from one building.
Year 1 Gross
$114K
4 units, 85% occupancy
Year 5 Gross
$136K
+3.5%/yr growth
Year 10 Gross
$161K
compounding
Year 20 Gross
$228K
inflation-adjusted
Year 30 Gross
$323K
mortgage paid off
30-Year Total
$3.4M+
cumulative gross
Year-by-Year Income Table
| Year | Avg Rate/Unit/Mo | Gross Annual | Operating Expenses (35%) | Net Operating Income |
|---|---|---|---|---|
| 1 | $2,800 | $114,240 | $39,984 | $74,256 |
| 2 | $2,898 | $118,238 | $41,383 | $76,855 |
| 3 | $2,999 | $122,376 | $42,832 | $79,544 |
| 5 | $3,211 | $131,023 | $45,858 | $85,165 |
| 7 | $3,438 | $140,272 | $49,095 | $91,177 |
| 10 | $3,833 | $156,406 | $54,742 | $101,664 |
| 12 | $4,103 | $167,387 | $58,585 | $108,802 |
| 15 | $4,574 | $186,614 | $65,315 | $121,299 |
| 20 | $5,413 | $220,858 | $77,300 | $143,558 |
| 25 | $6,406 | $261,366 | $91,478 | $169,888 |
| 30 | $7,583 | $309,388 | $108,286 | $201,102 |
02
Cash Flow Over Time
The Cash Flow Arc
Year 1 is close to breakeven. Year 3 after refinance eliminates MIP — cash flow turns clearly positive.
Year 10: +$55,000/year ($4,583/month). Year 20: +$88,000/year ($7,333/month).
After payoff: ~$190,000+/year nearly pure profit.
| Year | NOI | Debt Service | Annual Cash Flow | Monthly CF | Status |
|---|---|---|---|---|---|
| 1 | $74,256 | $84,204 | −$9,948 | −$829 | Ramping |
| 2 | $76,855 | $84,204 | −$7,349 | −$612 | Ramping |
| 3 ★ Refi | $79,544 | $70,476 | +$9,068 | +$756 | Cash flowing |
| 5 | $85,165 | $70,476 | +$14,689 | +$1,224 | Growing |
| 7 | $91,177 | $70,476 | +$20,701 | +$1,725 | Strong |
| 10 | $101,664 | $70,476 | +$31,188 | +$2,599 | Strong |
| 15 | $121,299 | $70,476 | +$50,823 | +$4,235 | Very strong |
| 20 | $143,558 | $70,476 | +$73,082 | +$6,090 | Passive income |
| 25 | $169,888 | $70,476 | +$99,412 | +$8,284 | Excellent |
| 30 (paid off) | $201,102 | $0 | +$201,102 | +$16,759 | Pure profit |
The Refi Turning Point (Year 3 ★)
Refinancing from FHA 7.25% to conventional 6.5% eliminates the $659/month MIP and drops the rate simultaneously.
Combined: $1,144–$1,459/month in permanent cost reduction. This single event is what flips the cash flow from negative to clearly positive. Don't miss this trigger.
03
Equity Curve — 3.5% Annual Appreciation
| Year | Property Value | Loan Balance | Total Equity | YoY Gain | HELOC Available (80% LTV) |
|---|---|---|---|---|---|
| Day 1 | $1,100,000 | $931,776 | $168,224 | Built-in | — |
| 1 | $1,138,500 | $922,980 | $215,520 | +$47K | — |
| 2 | $1,178,348 | $914,473 | $263,875 | +$48K | ~$26K |
| 3 | $1,219,590 | $905,584 | $314,006 | +$50K | ~$70K |
| 5 | $1,305,996 | $886,497 | $419,499 | +$53K avg | ~$138K |
| 7 | $1,397,953 | $866,042 | $531,911 | +$56K avg | ~$252K |
| 10 | $1,552,969 | $831,524 | $721,445 | +$63K avg | ~$411K |
| 15 | $1,834,061 | $755,226 | $1,078,835 | +$71K avg | ~$712K |
| 20 | $2,165,756 | $649,882 | $1,515,874 | +$87K avg | ~$1.08M |
| 30 (paid) | $3,020,523 | $0 | $3,020,523 | — | Full value |
04
Pay It Down — Acceleration Scenarios
| Extra Monthly | Payoff Year | Years Saved | Interest Saved | When to Start |
|---|---|---|---|---|
| $0 (base) | Year 30 | — | — | — |
| One extra payment/yr (~$7K) | Year 26.5 | 3.5 yrs | $88,000 | Year 3 (cash flow positive) |
| $500/month extra | Year 24.8 | 5.2 yrs | $134,900 | Year 3–4 |
| $1,000/month extra | Year 21.3 | 8.7 yrs | $236,800 | Year 5 (strong CF) |
| $2,000/month extra | Year 17.1 | 12.9 yrs | $383,200 | Year 7+ |
Rule
Don't start extra paydown until Year 3 — keep reserves during ramp-up. After refi turns cash flow positive,
redirect surplus to one extra payment/year minimum. By Year 5 at $1,200+/month surplus, push $1,000/month to principal.
You own the building free and clear by Year 21–22. At that point four MTR units generate ~$190,000/year with zero debt service.
05
Strategy Comparison
| Strategy | Year 1 CF | Year 5 CF | Year 10 CF | Year 20 CF | Year 10 Equity | 30-Yr Cumulative |
|---|---|---|---|---|---|---|
| All 4 units LTR (unfurnished) | −$28K | +$8K | +$22K | +$51K | $721K | $1.4M |
| All 4 units MTR ($175K land) | −$6K | +$28K | +$55K | +$88K | $721K | $2.1M |
| All 4 units MTR ($40K land) | +$11K | +$39K | +$66K | +$99K | $780K | $2.1M |
| MTR + $1,000/mo paydown | −$18K | +$16K | +$48K | +$97K (paid off) | $780K | $2.0M |
| MTR + HELOC → Property 2 (Yr 3) | −$6K | +$32K | +$77K | +$143K | $1.5M+ | $3.5M+ |
MTR vs LTR Lifetime Gap
MTR vs unfurnished LTR on the same building = $700,000 more in cumulative income over 30 years.
The $63K in furnishing costs to launch MTR pays back in under 12 months from the income premium alone.
The HELOC + Property 2 scenario is the real multiplier — two properties appreciating simultaneously puts you at $3.5M+ by Year 20 from one initial decision.