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tools/re-breakeven.py

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+#!/usr/bin/env python3
+"""Find break-even scenarios for rental property cash flow Day 1"""
+
+# Fixed assumptions
+MONTHLY_RENT = 2000
+VACANCY = 0.05
+EFFECTIVE_MONTHLY = MONTHLY_RENT * (1 - VACANCY)  # $1,900
+PROPERTY_TAX_RATE = 0.007  # ~$2400 on $345K
+INSURANCE_RATE = 0.004  # ~$1400 on $345K
+MAINTENANCE_RATE = 0.006  # ~$2000 on $345K
+DOWN_PAYMENT_PCT = 0.20
+
+print("=" * 70)
+print("BREAK-EVEN ANALYSIS: What price + rate = Day 1 cash flow positive?")
+print("=" * 70)
+print(f"\nFixed: Rent $2,000/mo | Vacancy 5% | Effective income: ${EFFECTIVE_MONTHLY:,.0f}/mo")
+print(f"Down payment: 20% | 30-year fixed\n")
+
+# Calculate monthly mortgage payment
+def monthly_payment(principal, annual_rate, years=30):
+    r = annual_rate / 12
+    n = years * 12
+    if r == 0:
+        return principal / n
+    return principal * (r * (1 + r)**n) / ((1 + r)**n - 1)
+
+print(f"{'Price':>10} {'Rate':>6} {'Down':>10} {'Loan':>10} {'P&I':>8} {'Tax/Ins':>8} {'Maint':>7} {'Total':>8} {'Cash Flow':>10} {'Rent/Price':>10}")
+print("-" * 100)
+
+results = []
+for price in range(200000, 360000, 10000):
+    for rate_bps in range(300, 700, 25):
+        rate = rate_bps / 10000
+        
+        down = price * DOWN_PAYMENT_PCT
+        loan = price * (1 - DOWN_PAYMENT_PCT)
+        pi = monthly_payment(loan, rate)
+        
+        tax_ins = (price * PROPERTY_TAX_RATE + price * INSURANCE_RATE) / 12
+        maint = (price * MAINTENANCE_RATE) / 12
+        
+        total_monthly = pi + tax_ins + maint
+        cash_flow = EFFECTIVE_MONTHLY - total_monthly
+        rent_to_price = (MONTHLY_RENT / price) * 100
+        
+        results.append((price, rate, down, loan, pi, tax_ins, maint, total_monthly, cash_flow, rent_to_price))
+
+# Show scenarios that are cash flow positive or near break-even
+print("\n📗 CASH FLOW POSITIVE SCENARIOS (Day 1):")
+print("-" * 100)
+positive = [r for r in results if r[8] >= 0]
+for r in sorted(positive, key=lambda x: -x[8])[:20]:
+    price, rate, down, loan, pi, tax_ins, maint, total, cf, rtp = r
+    print(f"${price:>9,} {rate:>5.2%} ${down:>9,} ${loan:>9,} ${pi:>7,.0f} ${tax_ins:>7,.0f} ${maint:>6,.0f} ${total:>7,.0f}  ${cf:>+8,.0f}    {rtp:.2f}%")
+
+print(f"\n\n📕 YOUR CURRENT DEAL ($345K @ 6.25%):")
+price, rate = 345000, 0.0625
+down = price * DOWN_PAYMENT_PCT
+loan = price * (1 - DOWN_PAYMENT_PCT)
+pi = monthly_payment(loan, rate)
+tax_ins = (price * PROPERTY_TAX_RATE + price * INSURANCE_RATE) / 12
+maint = (price * MAINTENANCE_RATE) / 12
+total = pi + tax_ins + maint
+cf = EFFECTIVE_MONTHLY - total
+print(f"${price:>9,} {rate:>5.2%} ${down:>9,} ${loan:>9,} ${pi:>7,.0f} ${tax_ins:>7,.0f} ${maint:>6,.0f} ${total:>7,.0f}  ${cf:>+8,.0f}    {(MONTHLY_RENT/price)*100:.2f}%")
+
+# Find exact break-even rate at different price points
+print(f"\n\n📊 BREAK-EVEN INTEREST RATE BY PRICE POINT:")
+print("-" * 50)
+for price in [200000, 220000, 240000, 260000, 280000, 300000, 320000, 345000]:
+    for rate_bps in range(100, 1000, 1):
+        rate = rate_bps / 10000
+        loan = price * (1 - DOWN_PAYMENT_PCT)
+        pi = monthly_payment(loan, rate)
+        tax_ins = (price * PROPERTY_TAX_RATE + price * INSURANCE_RATE) / 12
+        maint = (price * MAINTENANCE_RATE) / 12
+        total = pi + tax_ins + maint
+        cf = EFFECTIVE_MONTHLY - total
+        if cf <= 0:
+            # Previous rate was break-even
+            be_rate = (rate_bps - 1) / 10000
+            print(f"  ${price:>9,}  →  break-even at {be_rate:.2%} or lower")
+            break
+    else:
+        print(f"  ${price:>9,}  →  cash flows positive even at 10%+")
+
+# Find exact break-even price at different rates
+print(f"\n\n📊 BREAK-EVEN PRICE BY INTEREST RATE:")
+print("-" * 50)
+for rate_pct in [3.0, 3.5, 4.0, 4.5, 5.0, 5.5, 6.0, 6.25]:
+    rate = rate_pct / 100
+    for price in range(400000, 100000, -1000):
+        loan = price * (1 - DOWN_PAYMENT_PCT)
+        pi = monthly_payment(loan, rate)
+        tax_ins = (price * PROPERTY_TAX_RATE + price * INSURANCE_RATE) / 12
+        maint = (price * MAINTENANCE_RATE) / 12
+        total = pi + tax_ins + maint
+        cf = EFFECTIVE_MONTHLY - total
+        if cf >= 0:
+            print(f"  {rate_pct:.2f}%  →  max price ${price:>9,}  (rent/price: {(MONTHLY_RENT/price)*100:.2f}%)")
+            break
+    else:
+        print(f"  {rate_pct:.2f}%  →  no viable price found")
+
+# The 1% rule check
+print(f"\n\n📊 1% RULE CHECK:")
+print(f"  $2,000 rent × 100 = $200,000 max purchase price")
+print(f"  Your deal: $345,000 = {(2000/345000)*100:.2f}% (needs to be ≥1.0%)")
+print(f"  To hit 1% at $345K, rent needs to be: ${345000*0.01:,.0f}/mo")
+print(f"  To hit 0.8% at $345K, rent needs to be: ${345000*0.008:,.0f}/mo")