Meeting Future Income Goals from Real Estate Investing

[Brian Green]

I am a real estate investor specializing in small multi-family properties in the Saratoga Springs NY area. In the 1 1/2 years I have purchased 3 properties in the area and am managing them myself. 

I would like to know if anyone has a good spreadsheet or calculation method for determining how many properties(or a total market value of properties)  and at what rate or return I would need to purchase over the next 10 years to achieve a defined income goal? I would use my existing properties and their performance as my baseline and then extrapolate out from there but its a bit confusing with equity pay down schedules and factoring in future purchases over time. 

Say for example I want to reach $250k annually in net income from my investment business and I am realizing 25% ROI including equity earned from paying down the mortgages. I am trying to figure out how many properties(or their total market value) I need to buy and with what frequency I need to buy them in order to achieve my income goal ten years from now.

[Account Closed]

I think you are trying to do a future values calculation for multiple cash flows. A great source for how to do that is Frank Gallinelli's book, What Every Real Estate Investor Needs to Know about Cash Flow and 36 Other Calculations.

I think you don't want to treat the problem as a Mother-Of-All-Excel-Formulas. I mean, don't get Excel to spit out one answer for how many properties, frequency, and rate of return. Instead, model the future values for a list of separate properties, each with its own assumptions and in its own row. Then, add them up. Play with the assumptions in each row, in effect running a goal seek by hand. You'll see how the scenarios play out and begin to formulate a picture of your plan.