I know that Cash on Cash Return = Total Cash Flow Pre-Tax/Actual Cash Invested. ROI = Net Income/Total Cost.
My question is whether the Total Cost in the ROI formula includes the Sale Price of the property or just the amount of actual cash invested.
Hi @Mike Celli . Thanks for asking that question.
Here are a couple of links on that topic:
Most people calculate ROI just like the Internal Rate of Return (IRR). You calculate your total cash outflows and inflows over the hold period. ROI is a more comprehensive calculation for the total return of an investment.
Hope that helps.
Thanks for the feedback, I have not yet ran the numbers on bigger pockets but, I will tonight.
I’m hoping for at least $150 cash flow per door myself. Which is a number I think will change once I’m establishing and have a understanding what works for me and my business in my areas of investing