calculation misunderstood

[Vicente Kaipat]

I'm having diffuculty understanding this calculation. Please help me with the underlined numbers.  If you purchase the same $100,000 property (in point 3 above) but get an $80,000 loan at 5.5% for 30 years and put 20% down you now have a monthly payment of $454 per month leaving you with $213 per month in positive passive cash flow ($8,000 / 12 months = $667 - $454 payment = $213).That means on your $20,000 you are making $2,556 per year or a 12.7% return on investment instead of an 8% return on investment on your $100,000.

[Jon Holdman]

@Vicente Kaipat I think you may have meant to post this in some existing thread.  Can you cut and paste in a link to the thread you were reading when you posted this?  If you can, I'll move this there and try to answer your question.