All Forum Posts by: Brian Quist

Thank you so much for the reply Adam. The differentiation between COC and ROI is helpful. My initial question was mostly just to help me better understand how to properly evaluate my properties so that I can decide what to do next - based on what I'm seeing elsewhere in the market.

Question: How and where would you factor in the appreciation of the property?  For example if my equity in the property increased by 50K the last year would you add that to your ROI?

My COC and ROI aren't terrible on this property we're using as a reference.  However, my return on equity isn't as strong. As you mentioned coastal appreciation has put my equity at $570k.  When you run that against the total income of $17,688 you get 3.1%.

Which does lead to your ultimate question of what to do with this info.  I'm leaning towards selling this house soon and moving that equity into a variety of stronger real estate investments: syndication, or possibly building on one of my other properties where I can realize better returns.  Sounds like you have clear goals based on your region and niche.

I appreciate the reply and dialogue. 

Hello All,

I'm an owner of a few different rental properties. 2 multifamily and 1 single family. Seattle/Los Angeles.
Feeling confused on how to accurately calculate Cash on Cash Return and Return on Equity rates

Question is, should I combine annual cash flow as well as annual mortgage loan pay down as these 

For example:

single family house. total cash invested $106k. Annual cash flow after all expenses is $10,000 (not great).
So my COC should be 1.6%.
But if you factor in the loan pay down the annual cash flow increases to 17,688.
which would make the COC 3%. (still not great).

which is it?
thx

After listening to the podcast and reading some articles I've started creating much better spreadsheets tracking my 3 rental properties. Specifically I'm trying to analyze ROI (or cost of capital) vs ROE. Two of my properties have gained a lot of equity and I'm debating selling one in order to re-allocate that money into better deals.

Here's my question; I refinanced one of my properties in 2017 and I'm wondering where on my spreadsheet I should allocated the money I pulled out?  Should I deduct it from my original capital costs.  This makes sense to me, but suddenly means my ROI for that property in the years after shoot way up since the capital investment is now around $10.  To me the analysis seems off now.  The other option is just to consider it rental income for that year and have 1 year of off the charts cash flow.

Appreciate any input. this is my first post on the forums.

Brian