Mike's draw from Lesson 6: $6,500 a month. His exit number is not a mystery. It is that.
The garage apartment from Lesson 11 finished at $186,000 and rents for $1,350. The monthly waterfall, in full:
- Rent: $1,350
- Property taxes: minus $180
- Insurance: minus $65
- Reserve: minus $85
- Debt service: $0. Lesson 11 was paid in cash from the dedicated account. That absence is why the net is what it is.
- Subtotal before vacancy and maintenance: $1,020
- Vacancy allowance, 5% of rent (assumption): minus $67.50
- Maintenance allowance (assumption): minus $100
- Cash flow: $852.50 a month, before income tax
- Exit number: $6,500 per month
- First unit cash flow: $852.50 a month
- Coverage after one unit: about one-eighth of the draw
- Units like it to cover the draw: eight. $6,500 divided by $852.50 is 7.6. Round up. Nobody retires on six-tenths of a unit.
He did not retire off one garage. He started counting. At $3,200 a month deployed from Lesson 10, the count continues on a schedule he chose, not a deadline his knees chose for him.
Mike's door is hold, with a step back in the middle: run the company less every year, let the systems carry it, let the units stack until his draw arrives on its own.