Mortgage Rental Opportunity – Rent My Mortgage

Public Buyer Owner Value

Example Home

Buyer and Owner Financial Profiles (Admin Visible Only)

Post My Offer

to the Homeowner

Interest

Downpay

Months Term

Buyer Inputs

Owner Inputs

Owner’s Current Home

Owner’s Next Home

Mortgage Duration – Buyer

Mortgage Duration – Owner C

Current Home

Mortgage Yrs Owner Nxt

Next Home

IRS Depr

IRS Depr Recapture Max Tax Rate

IRS Cap Gains

IRS Cap Gains Tax Long Term

Bank LTV

Bank LTV Downpay Requirement

Depr Yrs

Yrs

Home Value Percent

Calculations (Admin Visible Only)

Downpay Paid

Principal Rented

Downpay Received

Constants

Address

Home Price

Deal Start Flag – Owner

Have this field match the “0” month flag in Cumulative Financials

Deal Start Flag – Buyer

Have this field match the “1”month flag in Cumulative Financials

Deal End Flag – Owner

Have this field match the “2” month flag in Cumulative Financials

Real Time 30 / 15 Yr Rate Flag

Have this field match the “3” flag in Cumulative Financials (real time rate sequence ID)

FV Monthly Pay Flag

Have this field match the “4” flag in Cumulative Financials

FV Annual Pay Flag

Have this field match the “5” flag in Cumulative Financials

RMM Amortization Yrs

Default 30yrs

Initial Calcs

Owner Equity at Start

Downpay

Deferred Equity

Buyer Principal Rented

with Mortgage Rental

Buyer Principal Mortgaged

if Mortgaged with Bank

Owner Principal at Start

Owner Orig Mortgage

Interest

Owner Low Rate

Mult

Exp

Add

Principal at Start

RM

Buyer Mortgage Amount

Interest

Mult

Exp

Add

RMM Payment – Int Only

Interest Only Method to Improve Tax Efficiency

Buyer if Bank Mortgage Amount

Interest

Mult

Exp

Add

RMM Payment – Int Only

Interest Only Method to Improve Tax Efficiency

RMM Payment – Full P&I

Future Value FV)

Buyer Investment Yield

Mult

Exp

Add

Lift

FV Monthly Factor – Buyer

Capital Gain of Future Value of equal monthly payments

Owner Investment Yield

Mult

Exp

Add

Lift

FV Monthly Factor – Buyer

Capital Gain of Future Value of equal monthly payments

Buyer Investment Yield

Mult

Exp

Add

Lift

FV Annual Factor – Owner

Capital Gain of Future Value of equal Annual payments

Owner Investment Yield

Mult

Exp

Add

Lift

FV Annual Factor – Owner

Capital Gain of Future Value of equal Annual payments

Buyer Tax Impact

Buyer Mortgage Amount

Interest

Mult

Exp

Add

Mortgage Interest Deduction

Cumulative mortgage interest over deal life, avg per year. Deduction IRS capped mortgage amount based on Buyer Tax Profile.

Cumulative Mortgage Interest Buyer

Cumulative mortgage interest over deal life

State Code

Rate

State Income Tax Rate

Income

Income Mid Point based on Tax Bracket selection

St Income Tax

Headroom

Headroom remaining above State Income Tax and under IRS Max Tax Deduction limit to deduct Property Tax

Property Tax Deduction

IRS capped to first $xxk of property tax, based on Buyer’s Tax Profile.

Total Deduction

Portion Above IRS Standard Deduction

Annual Tax Impact

Foregone Tax Deductions (mortgage interest, property tax)

Owner Tax Impact

Mortgage Rental per Month

Deal Duration

RMM Income Full Deal

Owner Mortgage w 750 cap

TBD if $750k IRS cap

Interest

Mult Deal Start

Exp Deal Start

Add Deal Start

CUMIPMT Deal Start

Mult Deal End

Exp Deal End

Add Deal End

CUMIPMT Deal End

Cumulative Interest for Tax Deduction

Property Tax Full Deal

TBD IRS capped to first $10k of property tax per year when Rental Home.

Home Insurance Full Deal

HOA Full Deal

Home Owner Association Cost

Depreciation

Depreciate Only the Home’s Purchase Price, Not the Current Market price

Total Deductions

Rental Home Operating Costs: Interest, Property Tax, Insurance, HOA, Depreciation (recapture later).

Deferred Equity – Max Portion Deductible

Home’s Equity

Deferred Equity

Max Mortg Int Deduction

based on IRS Filing Status

Price of Next Home

default to price of current home (“same sizer”)

Deferred Equity Tax Deductible

limits deferred equity deducted to portion above planned loan and below max deduction limit

Home Price

Default same as current home.

Deferred Equity

original [2852], disregards deduction max

Interest

New Home

Mult

Exp

Add

Deferred Equity Interest

New Home, Full Deal

Deferred Equity

formerly [2852], disregards deduction max

Interest

New Home

Mult

Exp

Add

Deferred Equity Interest

New Home, Full Deal

Net Taxable Full Deal

Annual Tax Impact Owner

Owner Equity Cash Out at Deal End

Home Price

Buyer Equity Built

from Mortgage Rental

Buyer Balloon Payment

Home Price minus Buyer RMM Equity

Pay Back Down Pay Advance

Owner Mortgaged Amount

Interest

Low Bank Rate

Mult

Exp

Add

Owner Payoff Bank

at Deal End

Keep Advance Equity

Deferred Equity Amount

Interest

Owner Next Mortgage Rate

Mult

Exp

Add

Owner Pay Deferred Equity

One Time Payment at Deal End

Owner Cash Out End of Deal

Buyer Equity Cash Out at Deal End

Buyer Mortgaged Amount

Interest

High Bank Rate

Mult

Exp

Add

Equity Built

if Bank Mortgaged

Buyer Mortgaged Amount

Interest

Low Mortgage Rental

Mult

Exp

Add

Equity Built

if Mortgage Rental

Accelerated Equity

Homebuyer

Home Buyer

Benefits

Home Price

from Public Real Estate Markets

The Cash Opportunity

After-Tax
Buyer and Owner Split
Through Mortgage Rental

Unlock the Cash Hiding Between Mortgages

Welcome to Mortgage Rental!

You benefit from the difference between the Buyer’s high bank rate and the Owner’s lower rate. Share the saved interest, factoring in deferred equity, tax ramifications, and investment yield on cash flows.

Homeowner

Home Seller

Log In

See Cash Gains of Buyer and Owner

Model Cash Scenarios: Mortgage Rent, Down-pay, Months

Discover Buyer’s Savings

Full Deal Savings

Mortgage Rental
vs.
Bank Mortgage

Buyer’s Bank Interest

High Bank Market Rate to Avoid

Savings Components Summary

Monthly Savings

Mortgage Rental vs. Bank Payments

Annual Tax Effects

Due to Foregone Tax Deduction

Bonus!

Yield from
Investing Cash Flows
(Note: Yield before tax)

Equity Components

Reduced Principal

Equal to Reduced
Principal as with Bank

Home’s Market Value Gains Based on Real Estate Market Growth (Buyer Benefit)

Shape the Mortgage Rental Journey

Optimize the Monthly Payment

6.60%

1%9%

for Balanced Buyer and Owner Gains

Monthly Payment

P&I, Escrow

Set the Initial Down-pay

20%

5%35%

Tip: A larger down payment results in reduced deferred equity and increased tax efficiency.

Downpay

Like a Bank Mortgage

Duration Months

Mortgage Rental Duration Term Months

Overall Gains

Buyer-Owner to Split,
After-tax

Waterfall – Go from Interest Spread to Gains

Mortgage Interest Spread

Deferred Equity Cost

Tax Effects

Net Cash Gain

Invested Cash Gain

Overall Gains

Buyer-Owner to Split,
After-tax

Discover Owner’s Gains

Full Deal Gains

Mortgage Rental
vs.
Selling Today

Owner Low Interest

Low Mortgage Rate to Rent Out

Gains Components Summary

Monthly Gains

Mortgage Rental Over Low Rate Bank Mortgage

Annual Tax Effects

from Mortgage Rental Cash Flows, Yield, and Deductions

Equity

Net Additional Equity from Mortgage Rental

Bonus!

Yield from
Investing Cash Flows
(Note: Yield before tax)

Refine Buyer’s Profile

Buyer’s Bank Mortgage Financials

Mortgage Interest

How much would Bank charge?
Default to current market rate.

Investing the New Cash Savings

Yield

Investment Yield %

IRS Categories 2024

Tax Filing Status

Tax Bracket

by Income Level (default 24%)

Enhance Home’s Financials

Example Home

Home Current Market Price

per Real Estate Markets (Read Only)

Purchase Price

Purchase Price when Owner Acquired

Home’s Mortgage

Yr Originated

Mo Originated

Owner Orig Mtg Amt

Current Mortgage
Original or Refinanced

Owner’s Low Interest Rate

Low Interest Rate at Time of Mortgage Origination

Principal Remaining

Estimated from 30yr Fixed Amortization
Adjust as Needed (if known, e.g., by owner)

Adjust +/-

Add / Subtract Principal
e.g., if extra payments were made or had variable interest

Home’s Operating Costs

Property Tax

per Yr

Hazard Ins

per Yr

HOA Costs

per Yr

Refine Owner’s Profile

Owner’s Next Home

Mortgage Interest

How much would Bank charge?
Roll Deferred Equity into next home’s mortgage.

Investing the New Cash Gains

Yield

Investment Yield

IRS Categories 2024

Tax Filing Status

Tax Bracket

by Income Level (default 24%)

Homebuyer Cash Flow Details

Interest

Market Rate

Interest

Mortgage Rental

Yield

My Investments

Bank Mortgage

Mortgage Rental

Cash Difference

Yield

Deal Start

Downpay

20% Downpay Bank Baseline

Downpay

Pay to Owner, Negotiable

Downpay Difference

(-) Larger Downpay vs Bank
(+) Smaller Downpay

Invested Difference Yield

Downpay difference invested in (+) or pulled from (-) market

Monthly

Bank Payment

Would pay to Bank at Current Market Rate (P&I, Property Tax, Hazard Insurance) and to HOA

Mortgage Rent Payment

Mortgage Rental Payment to Owner (Lease, Property Tax, Hazard Insurance, HOA)

Cash Savings / mo.

Cash Staying in Buyer’s Pocked Each Month

Yield

Tip: Invest the Savings or Pay Down High Interest Debt

Annual

Tax Deduction

Would Save Income Tax Deducting Property Tax, Mortgage Interest

Forgone Tax Deduction

Ah snap! No deduction for Mortgage Rental. But savings outweigh this!

Tax Effect

Opportunity Cost

Value Lost for Not Being Able to Use Money for Other Purposes

Deal End

Principal Balance

Original Loan Minus Equity Built

Balance to Owner

Home Price Minus Downpay
Buyer Keeps the Equity (same as with Bank)

Principal Difference

Yield

Cash Gains

After-tax, Full Deal

Yield on Cash Gains

Full Deal

Grand Total:

Overall Homebuyer Benefit

After-tax, Full Deal

Homeowner Cash Flows Details

Sell Home Today

Mortgage Rental Alternative

Difference

Yield

Interest

Low Bank Rate

Interest

Mortgage Rental

Interest

Owner’s Bank Borrowing Rate

Yield

My Investments

Sell Home Today

Existing Mortgage

Mortgage Rental

Deferred Equity

Cash Difference

Yield

Equity Cash Out

Home Price minus Equity

Deal Start

No Change to Existing Mortgage

Receive Downpay

Receive from Buyer

Deferred Equity

Financed

Starting Difference

Yield On Start

Monthly Bank Mortgage

P&I, Escrow, HOA

Mortgage Rent

Income from Buyer

Deferred Equity Payment

Finance P&I

Monthly Difference

Yield On Monthly

Tip: Invest the Gains or Pay Down High Interest Debt

Annual Tax Effects

Moved Under Mortgage Rental Column

Tax Effects

Schedule E for Mortgage Rental

Tax Effects

Schedule A Itemized Deduction

Annual Difference

Yield On Annual

Tip: Invest the Gains or Pay Down High Interest Debt

Owner Pay Bank

Payoff Original Mortgage Principal

Buyer Payoff Owner

Receive Remaining Principal from Buyer: Home Price, Less Downpay, Less Buyer Equity, Less IRS Depreciation

Payoff Deferred Equity

Pay Down Remaining Principal

Ending Difference

Net Equity from Principal payments made on current home, deferred equity, less Equity shared to Buyer, less Depreciation Tax

Yield

Deal End – No Yield

Full Deal Difference

(+) Gains / (-) Losses

Full Deal Yield

Full Deal Yield On Cash Gains

Grand Total:

Overall Homeowner Benefits

Full Deal

Homebuyer Tax Effects

Tax Profile Recap

Adjust Above in Buyer Profile

Tax Bracket

Based on Filing Status and Income

Max Mortgage Principal

IRS Deduction Cap
Based on Filing Status

Max Property Tax

IRS Deduction Cap
Based on Filing Status

Standard Deduction

Based on Filing Status

Tax Deduction Amounts

Mortgage Interest Deduction

Annual, on Mortgage Principal up to IRS Cap

Property Tax Deduction

Annual, up to IRS Cap

Backout Standard Deduction

Buyer already deducts this much without Mortgage Rental.

Total Tax Deduction

Total

Total Annual Foregone Tax Deduction

Income Tax Rate

Total Tax Effect

(+) Less Tax Paid to IRS
(-) More Tax Paid to IRS

Foregone Tax Annually

Homeowner Tax Effects

Tax Profile Recap

Adjust Above in Owner Profile

Tax Bracket

Based on Filing Status and Income

Max Mortgage Principal

IRS Deduction Cap
Based on Filing Status

Max Property Tax

IRS Deduction Cap
Based on Filing Status

Std Deduction Owner

Based on Filing Status

Mortgage Rental

Schedule E

Deferred Equity

Schedule A

Income

Mortgage Rental Income

Annual

Placeholder

Deductions

Mortgage Interest

Annual

Mortgage Interest

Interest of Deferred Equity rolled into Mortgage of Next Home

Property Tax Deduction

Schedule E, No IRS Cap

Property Tax Deduction

Net Zero since already being deducted without Mortgage Rental

Insurance Deduction

HOA Deduction

Home Owner’s Association Dues, if any

Depreciation

Home’s Purchase Price / 27.5 Yr
(excluding value of land)
IRS Depreciation Recapture Tax Effect is factored into Deal End

Total Tax Deduction

Total

Total Income and Deductions

Total

Income Tax Rate

Total Tax Effect

(+) Less Tax Paid to IRS
(-) More Tax Paid to IRS

Annual Tax Effect

Total Annual Tax Effect

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Back to Marketplace

Example Home

Buyer and Owner Financial Profiles (Admin Visible Only) arrowup6

Buyer Inputs

Owner Inputs

Owner’s Current Home

Owner’s Next Home

Calculations (Admin Visible Only) arrowup6

Constants

Initial Calcs

Owner Principal at Start

RM

Future Value FV)

Buyer Tax Impact

Owner Tax Impact

Owner Equity Cash Out at Deal End

Buyer Equity Cash Out at Deal End

Homebuyer

Benefits

Unlock the Cash Hiding Between Mortgages

Welcome to Mortgage Rental!

You benefit from the difference between the Buyer’s high bank rate and the Owner’s lower rate. Share the saved interest, factoring in deferred equity, tax ramifications, and investment yield on cash flows.

Homeowner

See Cash Gains of Buyer and Owner

Model Cash Scenarios: Mortgage Rent, Down-pay, Months

Discover Buyer’s Savings arrowup6

Savings Components Summary

Equity Components

Shape the Mortgage Rental Journey arrowup6

Waterfall – Go from Interest Spread to Gains

Discover Owner’s Gains arrowup6

Gains Components Summary

Refine Buyer’s Profile arrowup6

Enhance Home’s Financials arrowup6

Refine Owner’s Profile arrowup6

Homebuyer Cash Flow Details arrowup6

Bank Mortgage

Mortgage Rental

Cash Difference

Yield

Deal Start

Monthly

Annual

Deal End

Grand Total:

Homeowner Cash Flows Details arrowup6

Sell Home Today

Mortgage Rental Alternative

Difference

Yield

Sell Home Today

Existing Mortgage

Mortgage Rental

Deferred Equity

Cash Difference

Yield

Grand Total:

Homebuyer Tax Effects arrowup6

Tax Profile Recap

Tax Deduction Amounts

Total Tax Deduction

Total Tax Effect

Homeowner Tax Effects arrowup6

Tax Profile Recap

Mortgage Rental

Deferred Equity

Income

Deductions

Deductions

Deductions

Total Tax Deduction

Total Tax Effect

Buyer and Owner Financial Profiles (Admin Visible Only)

Calculations (Admin Visible Only)

Discover Buyer’s Savings

Shape the Mortgage Rental Journey

Discover Owner’s Gains

Refine Buyer’s Profile

Enhance Home’s Financials

Refine Owner’s Profile

Homebuyer Cash Flow Details

Homeowner Cash Flows Details

Homebuyer Tax Effects

Homeowner Tax Effects