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ROI = Appreciation +/- Cashflow divided by initial investment
For example:
Purchase Price: $449,900
Appreciation: 6%
Downpayment: $45,000
Cash Flow: $200 negative per month
$449,900 x 6% = $26,994
Negative cash flow for year = $2,400
$26,994 - $2,400 = 24,594
$24,594 divided by $45,000 = 54% ROI first year
If you put 20% down ($90,000) and you have $300 positive cash flow your ROI would be $26,994 + $3,600 divided by $90,000 = 34% ROI
In summary, based on the assumption of 6% appreciation and the cash flow, putting 10% down will give you a better ROI.
Contact: Anthony Navarro
Company: Trada Group
Tel: 415.227.4047 ext. 108
Cell: 415-305-3291
The Trada Group is the only company to develop and sell high quality, investment property across the US to individual real estate investors at pre-construction prices and provide professional on-site property management to maximize returns.
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