Updated about 5 years ago on . Most recent reply
19 yr old curious about what is wrong with my ROI calculations
(Purchase Price: 100 unit @$4m-$5m PP, $1m down)
ACCURATE CONSERVATIVE RETURN NUMBERS FOR APARTMENTS (Can apply to Single and Multi Family as well):
Income #1)Cash flow:@8%-10% ROI =$6.7k-$8.3k/month =$80k-$100k/year
Income #2)Principal Pay Down: @33% minimum of $3m mortgage ($15k/month mortgage) =$60k/year
Income #3)Appreciation: @2% =$80k, @3% =$120k, @4% =$160k
Income #4)Bought Below Market Value: @5% =$200k, @7.5% =$300k, @10% =$400k
Income #5)Other Value Adds (Not Renovations): @2% =$80k, @3.5% =$140k, @4.5% =$180k, 7% =$280k
Yearly ROI On $1m
1)Cash flow =7%-10%
2)Principal Pay Down = 6%
3)Appreciation =8%-16%
Total =21%-31% ROI ($210-$310k)
4)Bought Below market Value =20%-40% ROI (@5%-10% Below)
Total =45%-71% ROI ($450k-$610k)
5)Other Value Adds =10%-28% ROI (@2.5%-7% Value Add)
Total =55%-100% ROI ($550k-$900k)
As well as basically no taxes paid on all of it... (Property tax write offs alone =$70k/year, and cash flow is the only taxed income when doing everything properly so the $6.7k-$8.3k/month Taxable Cash flow = basically 0 taxes paid with just ONE right off/tax savings method).