How to model RE and Stock holding together for FI progress number

[Jared Nelson]

Hi guys, wondering how to combine RE and stock/bond holdings for a normalized FI progress number. For example. If someone held 1M in stocks and 400K in equities, but the equities were only 1/2 paid off, and would cash flow 24K/yr if fully paid off. It would be a mistake to just say your FI Progress number is 1.2M and then you can have a 4% withdrawal (48K). I think a better way would be to use the CAP RATE of the RE at full equity value (24K/400K = 6% ). Then apply that CAP Rate to the current equity would yield 12K/year (0.06x200). Multiply that by 25 years (conservative because you do NOT draw on principle in RE, like you do in stocks) yields a normalized value of 300K. Therefore your current FI Progress Number/model is 1.3M yielding 52K at 0.04%. What do you think of this method? Is there a better way to estimate your current state of mixed invesments RE/stocks?

Thanks in advance!