All Forum Posts by: John Pope

@Kristine Baker thanks for the feedback! This is mostly a hypothetical situation to test out my property analysis calculator I am working on. Your explanation definitely puts this in perspective! As for my business strategy, I would definitely prefer to invest with less up-front, so using a loan in this situation definitely suits my needs (at least for this property). My plan is to finish decking out this analysis calculator to include money earned equity and amortization per year to compare potential purchases.

I am looking at buying my first property, and was just crunching some numbers for a high level estimate, and I see that i actually have a higher ROI if I buy with a mortgage and 20% downpayment than if i buy the property outright. How is this possible? Am i calculating correctly? I am calculating ROI as (downpayment + closing costs) / total annual profit.