Year 1 Principal Paydown

Total principal paid down during the first year.

Example Result

Sample Data

$3,129

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Year 1 Principal Paydown Formula

Sum of principal portions of 12 monthly payments in Year 1

Sum of principal portions of 12 $2,049.13s in Year 1

$3,129

What This Means

A sample property priced at $385,000 with $2,850/month rent has a year 1 principal paydown of $3,129. This is free equity building paid for by your tenants. Even if a property barely cash flows, the principal paydown represents real wealth creation that is often overlooked when evaluating a deal.

Where This Value Comes From

Year 1 Principal Paydown is not entered directly — it is calculated from Loan Amount, Mortgage Interest Rate, and Loan Term. See the formula breakdown above and the detailed inputs below.

Calculated From

Year 1 Principal Paydown is calculated using these inputs:

Loan Amount

The total amount borrowed to finance the property purchase.

Found on your loan estimate

$308,000

Mortgage Interest Rate

The annual interest rate on the mortgage loan.

Found on your loan estimate

7.00%

Loan Term

The total length of the mortgage loan in months.

Found on your loan estimate

360 months

Used to Calculate

Year 1 Principal Paydown is used as an input for these calculations:

Debt Pay Down Return on Equity

Return Metrics

4.06%

Equity From Paydown Year 1

Debt Metrics

$3,129

Total Wealth Building Year 1

Equity & Wealth

$10,433

Net Worth Impact Year 1

Equity & Wealth

$10,433

Platform Distribution

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Why It Matters

This is free equity building paid for by your tenants. Even if a property barely cash flows, the principal paydown represents real wealth creation that is often overlooked when evaluating a deal.

Detailed Explanation

Year 1 Principal Paydown is the total reduction in your loan balance during the first year of ownership. Your tenants' rent payments effectively fund this equity building.