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Updated about 5 years ago on . Most recent reply

User Stats

825
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Kenneth LaVoie
  • Rental Property Investor
  • Winslow, ME
281
Votes |
825
Posts

return on investment calculation

Kenneth LaVoie
  • Rental Property Investor
  • Winslow, ME
Posted

I'm trying to determine my annual CAGR or IRR (not exactly the same but they'll be similar I think)

7 unit apartment building purchased june 2011, sold this coming august, calling it an 11 year holding period to keep it simple

purchase price 172,000 inc. closing costs

i lumped capex into expenses as most were updating kitchens, etc. and ended up being expensed vs. capitalized anyway. 

So, total profit over 11 years $152,000 ($16,888 per year avg.) although 5 of the past 6 years, cash flow has been 25K ish.

Our out of pocket, because we only needed to put down 10% was $15,450 (that doesn't jibe with 10% but looking at the HUD I can't figure out why, but inc. escrow that's what we put down)

$340,000 will be the sales price (350K minus a commission of 3%)

What is my annual "return on investment?" I like the IRR method if possible, but CAGR is good too. I just get confused...

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