Real Estate By The Numbers - Question on application

[Michael Hardler]

Hello! Trying to apply some of the great concepts and equations from the REBTN book. I think i’m overthinking this problem, so would appreciate some outsider perspective!

TLDR: How to calculate estimates on benefit/loss of paying down higher interest mortgages vs reinvesting? Looking for some other excel + finance junkies out there to help a brotha out!

I'm a bit stuck on trying to decide how to move forward with this question that must be on everyone's mind… What's the estimated benefit/loss when deciding to pay down a mortgage on a property versus saving that extra money to reinvest in another property? I don't feel like this situation was well described throughout the book or maybe it was and I just haven't connected the dots yet. For example: I have a 5 year ARM at 5.5% interest on a 243k mortgage that can adjust after that period, but my plan is to hopefully transition to a 30 year fixed rate before the adjustment occurs - so we can avoid that complexity. Using round numbers, consider debt service min is 1700/mo. Estimating that in 5 years it'll probably cost about 4% of the balance at that time to refinance, where having a lower balance would reduce cost. The impetus for this question comes from seeing an amortization calculator show that if I pay 1667/mo for the life of the loan (real numbers), i'll have paid 242,755 over 30 years in interest on the (now) 243k property assuming I keep a 5.5% interest rate. Amortization calculator shows that, for interest, if I paid 2k/mo, would pay ~147k, 2500/mo would pay ~96k, if paying 3k/mo would only pay 72k in interest for life of the loan. So what is the most accurate way to compare these two "investments" when considering appropriately compounded interest from investments/future value/etc.? Let's just assume I keep the house for the loan period for ease of calculation. Should i use 243k (paying 1700/mo) minus 147k/96k/72k and then calculate the difference in those over 30 years? Say 243-147= 96k over 30 years is a 3.2k/year benefit, obviously more benefit with higher monthly payments. For the "investment" side, i would be investing in real estate, but we can assume a 10% return to keep it simple. Let me know what you all think / how you'd draw up an excel calculator to play around with numbers and decide. An example excel would be clutch - but I won't expect too much! Thanks!