Real Estate Investment Break-Even Analysis: Month 27 Sale Proceeds

Fixed costs $49.4K/mo Year 1 base

Contribution margin 92% After variable costs

Break-even revenue $53.7K/mo Monthly target

Break-even timing Month 27 Forecast close

Break-even calculator

Test monthly revenue against variable deal costs and fixed overhead to see where the business breaks even.

Lean Base Full

Monthly revenue Revenue sets the margin available to cover fixed costs. $ Low sales High sales Variable expenses Direct deal costs rise as revenue rises. $ Low direct cost High direct cost

Money available to cover fixed costs $69,750 $75,000 revenue - $5,250 variable expenses

Margin ratio

93%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with property sales?

Cost classification

Break-even gets cleaner when deal costs stay with each property and company overhead stays separate. Here, purchase, renovation, and sale fees drive deal-level break-even; office overhead and payroll drive monthly cash coverage.

Expense	Cost	Break-Even Treatment	Common Mistake
Property purchase price	Variable	Assign to each owned property, from $700,000 for Apex to $1,500,000 for Haven.	Counting the purchase price as overhead and again in the required sale price.
Renovation labor and materials	Variable	Use the property construction budget, from $200,000 for Oasis to $3,000,000 for Apex.	Spreading project work across all deals instead of matching it to the property.
Disposition Related Costs	Variable	Apply only when a property sells; the model uses 3.0% in the first year and 2.5% in Year 5.	Treating sale fees as a monthly fixed charge before any sale happens.
Property Operating Costs (variable portion)	Semi-variable	Apply to active owned properties; the model uses 5.0% in the first year and 4.0% in Year 5.	Loading operating drag into fixed overhead and hiding weak asset-level margins.
Office rent, utilities, software, retainers, insurance, marketing, and travel	Fixed	Keep as company overhead; the listed recurring items total $19,000 per month.	Adding office overhead to each property sale price without checking monthly coverage.
Company payroll	Semi-fixed	Model staffing in steps: about $30,417 per month in the first year and $61,667 per month in Year 5.	Treating every salary as variable when hires rise by role and capacity.

How does break-even shift across lean, base, and full real estate investment scenarios?

Scenario table

Break-even is tight until Month 27, and the cash trough lands in Month 26. The lean case stays loss-making, the base case turns on the first sale, and the full case builds a bigger cushion.

Planning assumption only: sale proceeds, timing, and margins can shift as each property closes.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean pre-exit case	$0	$0	$49.4k	0.0%	-$49.4k	No sale proceeds yet, so fixed burn drives the loss.
Base seven-property case	$514.4k	$41.2k	$49.4k	92.0%	$423.8k	Month 27 is the break-even gate once first exits cover buy, build, and overhead.
Full mature case	$1.56m	$101.6k	$80.7k	93.5%	$1.38m	Higher revenue builds cushion, but resale proceeds still decide break-even.

What breaks first if the exit price slips, costs rise, or the sale runs late?

Stress test

The first break point is the exit price: a 1% miss already trims about $155k-$158k of cushion. Delays and rehab overruns stack on top, and once the sale slips past Month 27, cash gets tight because minimum cash is already $2.015M in Month 26.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$155M-$158M	$0 cushion	Base case is tight, so timing still matters.
Revenue shortfall	Sale proceeds land 1% below the break-even range.	$155.2M-$158.2M	$155k-$158k gap	A small price miss eats the cushion fast.
Fixed-cost pressure	One added holding month is absorbed before sale.	$155.5M-$158.5M	$494k gap	Delay pushes overhead up before the exit closes.
Margin pressure	Variable expenses rise from 65% to 80% of sale proceeds.	$155.2M-$158.2M	$233k-$236k gap	Cost inflation narrows the sale spread quickly.
Combined pressure	Sale slips past Month 27, price is 1% lower, and variable expenses rise to 80%.	$155.9M-$158.9M	$882k-$888k gap	Delay and weaker pricing can push the project off break-even.

What should you verify before buying, renovating, and listing the next property?

Founder checklist

Don’t buy or start rehab until the exit price, rehab budget, and cash cushion all clear the model. Break-even lands in Month 27, and minimum cash bottoms at $2.015M in Month 26, so a weak comp set or a slow sale can break the deal before EBITDA turns positive.

1Exit compsPre-close

Check sale comps before you buy and confirm the exit strategy before listing, because the purchase price still has to clear break-even after 3.0% to 2.5% disposition costs.

2Rehab budget$7.0M

Lock the rehab budget and confirm permits before the Month 5 start, because the seven planned builds total $7.0M and scope creep hits cash fast.

3Build span6-20 mo

Match contractor capacity to the longest schedules, since projects run from 6 months to 20 months and the exit month moves if the crew stalls.

4Fixed load$49.4K/mo

Cover about $19.0K in monthly overhead plus $30.4K in Year 1 wages, and don’t add the Month 13 Analyst / Associate until deal flow pays for it.

5Variable drag8.0%

Verify each deal still works after 5.0% property operating costs and 3.0% disposition costs, because Year 1 variable expenses take 8.0% before fixed overhead.

6Cash cushion$2.015M

Hold at least $2.015M through Month 26, because that is the model low point and one slow sale can turn a paper profit into a cash squeeze.