What is your Return on Equity?
Hi all,
Has anyone here ran a calculation of your return on equity? To do so, you take the current cash flow and you divide that by equity you have in your RE. So your personal home has little to no ROE. Right? It is a liability.
Plus, if you live in a place like I do, San Diego, you most likely have a lot of equity tied up in your Multifamily and personal residences. I have $5,000,000.00 in RE and about $2,500,000 in Equity. I cash flow approximately $120,000 per year. So, $120,000 divided by $2,500,000 or about 5% return on equity (ROE). Now I expect that cash flow to rise to $160,000 in the next 3-6 months, due to repositioning projects. That will put my ROE at approximately 6.5%. That is more like it.
What is your return on equity? Let us know here!! If you have an extremely low ROE, let me know by personal message and we could communicate and I could give you some suggestions to get yours much higher!!
Swanny