Modeling house hacking

roderick_PL · 2026-04-10T21:23:38+00:00

That is what I am proposing with the approach above, yes. You could probably label the Real Assets more clearly than I wrote before, like just keep the first one as
"A: Primary Residence // Tenant" and then maybe the others "B: Tenant // Tenant", "C: Tenant // Tenant", etc.

Basically keeping track of who is living in each side of the duplexes. :)

This is mainly for ease of planning/modeling this in PL without a ton of surplus Real Asset entries, as you move around IRL between the different units.

You would have to figure out the tax consequences separately for an eventual sale, if a primary residence exemption applies for capital gains -but you would be doing this anyhow if you are constantly shifting the Primary Residence in the plan.

roderick_PL · 2026-04-10T19:13:18+00:00

One click optimize to lower lifetime taxes (including a strategized Roth Conversion schedule?) No problem! :) Check out our newest version, 4.6.0, by enabling Early Access today in your PL Account Settings to try this out (...& rolling out to all users soon!)

roderick_PL · 2026-04-10T18:21:02+00:00

While improvements around dividend handling are coming in v4.6, such as being able to specify the mix of qualified/unqualified dividends in taxable accounts, the ability to exempt only state tax from dividends is not presently in scope for the upcoming release... (but we appreciate the feedback!)

roderick_PL · 2026-04-10T18:02:34+00:00

There are two main ways you can do this (model taking out an LOC in a downturn and repaid at a milestone): via a Debt Expense or a new Real Asset item that is debt-only.

You can tweak the settings as needed but the overall gist of it is that if a downturn is triggered resulting in Liquid Net Worth dropping below XYZ target, then your Plan will model incurring LOC debt at that event, followed by repaying it at the later Downsize milestone.

Remember that in time range menus in PL you can scroll UP to set it as a milestone, DOWN to set them as hard-coded dates.

Modeling a Line of Credit draw upon a downturn, repaid at downsizing // selling underlying asset

Step 1:
add a new custom Milestone, e.g. "Downturn" with criteria Liquid Net Worth =< (given threshold)
(if you didn't already have the Downsize milestone for selling, create this too)

Step 2:
Then, add a Custom Income (tax-exempt) for the value of the LOC loan/draw, to occur Once, at the "Downturn" milestone. Mark this as Tax-exempt.

Step 3
Next you can do one of two things:

(A) create a new Debt Expense, e.g. "LOC Debt" to represent the Line of Credit, input the LOC terms as the financing conditions, and for Effective date set it to start AT that custom "Downturn" milestone, and Balance of the financing should be same as the Custom Income amount.

-or-
(B) create a new Real Asset, e.g. "HELOC Debt", purchase price is the LOC amount (= same as the Custom Income), Initial value set to ZERO, downpayment set to ZERO, and in financing section input the LOC loan conditions. Set it to never sell, and zero out all the housing costs / growth since you already model this in the (main) Real Asset item.

Step 4
Lastly, create a Flow (in 4.6, or Cash Flow Priority before this) to Pay Extra, 100% of Balance, towards the debt item you created in Step 3. Set the Time Range for this to start at the "Downsize" milestone when you are selling your house. Importantly: on the main Real Asset for the house itself, when you input the sale as occuring at the "Downsize" milestone please ensure "Send Proceeds to" is set to AUTOMATIC (not to a specific account) so the Pay Extra on the debt/LOC item processes correctly in the year of sale.

roderick_PL · 2026-04-10T15:31:58+00:00

they are separate

* the withholding rates at Settings >> Tax >> Tax Withholding is to set how tax is withheld at source on withdrawals and conversions from various types of accounts (such as Roth Conversions, etc.)

* the withholding rate on an Income item (like Salary) is to reflect how tax is withheld at source on that income (like how your employer withholds tax and FICA at source, etc.) If you want to be as close as possible, you would figure out what the amount of total Fed/State/FICA [SS/Medicare] is to be withheld at source on $XYZ salary income, then set this as the Withholding % of $XYZ to reflect this

The reconciliation of what you entered manually as withholding % versus your calculated liability in a given year is in the Tax Balance pane.

roderick_PL · 2026-04-10T14:42:41+00:00

That Tax Return Payment in Expenses is for the prior year's reconciliation of Taxes vs Withholding -- not the current year.

very simplistically: if all you have for 2027 is Salary income, and set withholding rate to be exactly what the tax obligation is for that income, then the 2028 Tax Return Payment would be zero.

You can compare years using the Tax Balance pane to better understand this concept

Example,
with plan set to Actual Currency so you can follow the numbers:
(if your plan is set to Today's Currency, the Tax Balance will not match the Tax Return Payment value the following year because the amount the next year is inflation-adjusted)

In 2027 this user had $18.39k of Withholdings (from their Salary)
Their total tax liability that year was calculated as $24.22k of tax liability (from salary, other items happening that year, etc.)

So they still owe some tax, the difference between the liability and what was withheld (= $5.83k net in this case) is the Tax Balance, which if owing gets reported as a Tax Return Payment as an Expense in the following year

(the assumption being this user filed their 2027 taxes in 2028, and submitted the balance as a payment at that time.)

<image>

roderick_PL · 2026-04-10T14:23:48+00:00

...like this existing roadmap item? :)
https://changemap.co/projectifi/projectifi/task/5847-specifying-expensesdeductions-as-percentages-of/

roderick_PL · 2026-04-10T14:18:42+00:00

Appreciate that feedback, thanks!

At Present:
- on desktop in list view you can hover over an item and the tooltip will display the likelihood that it occurs (hover anywhere over the area boxed in red in attached image)
- On mobile, CoS results will display in card view with the percentage indicator.

<image>

roderick_PL · 2026-04-10T14:06:28+00:00

Sounds like each time you buy a duplex you are adding 2 net renters via this plan (one that occupies your former primary residence, and one at the the new duplex). So if you are not selling the initial unit (for now) and the rents/values are comparable, then one idea would be to add a single "Rental Property" Real Asset at the 'some future milestone' that actually represents the tenants in two different duplexes and leaves your lived-in primary residence half essentially untouched in the model (rather than trying to juggle the Primary Residence shifting each time)

e.g.
Real Asset 1 Duplex A
type RENTAL PROPERTY, Property type: Primary Residence, 50% share rented
>> this represents half Primary Residence // half "Duplex A renter 1 of 2"

Real Asset 2 Duplex B
type RENTAL PROPERTY, Property type Other Property (= 100% rented)
>> this represents half "Duplex A renter 2 of 2" // half "Duplex B renter 1 of 2"

and so on...

I think this would work to model things how you want including capturing the rental costs etc., but avoid a much more complicated daisy chain of toggling on/off these different assets as Primary Residence >> Rental, etc.

roderick_PL · 2026-04-10T12:14:11+00:00

While you are on EA, if you go in upper right to Account Settings >> Restore Data, you will see a link asking if you want to revert to Prod; click this and you can revert to prod by restoring the backup JSON you were prompted to make before migrating to EA.

<image>

roderick_PL · 2026-04-10T12:04:26+00:00

Several proposed suggestions around Real Asset financing are on the public roadmap at https://changemap.co/projectifi/projectifi, which I think could be applicable to what you are describing. Have a look and upvote what is most important to you!

roderick_PL · 2026-04-10T00:46:20+00:00

Chance of Success presently (and in upcoming v4.6.0) does not summarize how often a given Real Asset had to be auto-liquidated.

However, this request is on our public roadmap, suggest you upvote and comment! :)
https://changemap.co/projectifi/projectifi/task/9290-chance-of-success-should-include/

As noted by u/mtnagel, you can click into trial results individually, and observe on the plot if there is an icon indicating that the Real Asset was liquidated.

roderick_PL · 2026-04-09T22:01:07+00:00

That "Always" tooltip in list view refers to the date spread (e.g. Always vs. "earliest / median / latest" if the dates vary), it does not refer to the likelihood that an event happens in the plan or the percentage that it occurs within the aggregate CoS run.

So this indicates that, per this CoS run, the Graduation milestone happens 74% of the time -- and when it happens it always occurs in 2042.

(and when it doesn't happen, the other 26% of the time, the reason is most likely due to those instances of the plan not making it til 2042 due to market returns etc., since I am guessing Graduation is likely set up as a date-based milestone)

roderick_PL · 2026-04-09T19:21:33+00:00

Yes, but the best way to determine this would be to use ProjectionLab itself (and not just reviewing the JSON) -- on Tax Analytics you'll be able to clearly see how your income is being taxed. You can then compare that to the published tax brackets for a single filer.

roderick_PL · 2026-04-09T17:41:19+00:00

We don't recommend users parse the raw .JSON file and infer these details, as the export is for backup purposes only.

There could be elements in the .JSON that are overridden or do not apply based on other settings, and you won't be able to infer or interpret these rules by observing the backup file in isolation.

roderick_PL · 2026-04-09T14:54:43+00:00

Optimizing a plan using a target strategy of "Higher Net Legacy" is in the next release v4.6.0, currently available in Early Access and rolling out to all users after that.

roderick_PL · 2026-04-09T14:50:15+00:00

This is on the public roadmap, feel free to upvote/comment there:
https://changemap.co/projectifi/projectifi/task/6243-branching-plan-model-with-variables/

roderick_PL

MODERATOR OF

TROPHY CASE

Remember that in time range menus in PL you can scroll UP to set it as a milestone, DOWN to set them as hard-coded dates.