Updated almost 2 years ago on . Most recent reply
Real Estate Calculations
When I first started my real estate journey in 2018 and started listening to BiggerPockets Real Estate podcasts, I was only familiar with Cash on Cash return.
Once I actually entered the game in 2020, I quickly realized that there were many more calculations to take into consideration:
ROI - Return on Investment
ROE - Return on Equity
IRR - Internal Rate of Return
EM - Equity Multiple
Cap Rate - Capitalization Rate
CoC - Cash on Cash Return
AAR - Average Annual Return
(I’m sure I'm missing some)
I still struggle to juggle all of these calculations today.
Developers, syndicators, flippers, etc., will all have different preferences.
Which key calculations do you prioritize on when analyzing your deals? Are there any that you don't even consider?