Essential Property Investment Calculations: The numbers led approach to property investment and property management

by Robert Heaton

Default model – Outcomes and probabilities for two property case Outcome Property 1 Property 2 No. defaults, N Probability 1 ND ND 0 0.9 × 0.9 = 0.81 2 D ND 1 0.1 × 0.9 = 0.09 3 ND D 1 0.9 × 0.1 = 0.09 4 D D 2 0.1 × 0.1 = 0.01 Total 1.00