17 Year Model – Compounding Real Estate Deals and Units

Ultimately, money is the metric you should focus on compounding most, but compounding deals and units is fun too.

The great thing about that is that it’s a triple instead of a double.

For instance, if you invest $50K into a deal and get $100K back in 5 years, you can use that $100K to invest in two more deals.

If each deal is 200 units, then you went from 200 units to 600 all time units!

I like to track as many things as I can in regards to growth.

Number of deals and number of units are two of them.

“Progress equals happiness.” Tony Robbins.

“You’ll get more joy in accumulating a surplus of money than you can in spending it.” Richest Man in Babylon.

Example:

You start with a lump sum and invest in 3 deals year one.

You then add one deal per year out of your earned income.

Each deal is assumed to be 200 units.

The hold time on each deal is 5 years.

After the five years, you use the sale proceeds to buy another 2 deals.

It goes out to 17 years because that’s what I could fit on my white board.

Year 1: 3 deals, 600 units

Year 2: 4 deals, 800 units

Year 3: 5 deals, 1,000 units

Year 4: 6 deals, 1,200 units

Year 5: 13 deals, 2,600 units

Year 6: 16 deals, 3,200 units

Year 7: 19 deals, 3,800

Year 8: 22 deals, 4,400 units

Year 9: 37 deals, 7,400 units

Year 10: 44 deals, 8,800 units

Year 11: 51 deals, 10,200 units

Year 12: 58 deals, 11,600 units

Year 13: 89 deals, 17,800 units

Year 14: 104 deals, 20,800 units

Year 15: 119 deals, 23,800 units

Year 16: 134 deals, 26,800 units

Year 17: 195 deals, 39,000 units

Disclaimer: this does not advertise that doubling your investment is a guarantee. It is only any example to show how compounding can work.

All time deals and units which is shown is not the same as current number of deals and units held.

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