Rental Calc: 'Profit if Sold' Discrepancy
Has anyone else noticed a discrepancy in the 'Profit if Sold' portion of the rental calculator depending on if you decide to rehab the house vs not?
I know the Profit if Sold formula to be:
Profit if Sold = ARV in current year - Sales Expenses - Loan Balance - Money put into the deal + Total Cashflow since the purchase
where Sales Expenses = ARV * Sales Cost Percentage
I find the above formula to work out great every time I run a scenario where a rehab is involved. (EX: Buy a $150k home, put $25k into repairs, and ARV is $200k).
However, this formula does not hold true when no repairs are involved. (EX: Buy a $200k home that appreciates 2% each year)
The formula that mirrors the same outputs the rental calc gives is:
Profit if Sold = Property Value - Loan Balance - Money put into deal + Total Cashflow since the purchase
Does anyone have any insight into this? Thanks in advance!