Calculating ROI for BRRRR

[Uneeq Khan]

Need help understanding ROI in a BRRRR

So say ...

Purchase price $50k, down payment $10k, rehab $30k, ARV $100k, refinance $70k, therefore $10k is left in the deal.

Is ROI based off the $40k (money used) or the $10k (money left in the deal)?

Thanks.

[Brian Garrett]

Your ROI would be based off the actual cash you leave invested in the deal which in this case is the $10k.

If you were able to refinance all of your money back out (or even more) then your return would be infinite at that point.