What Is It?

A rate of return of a real estate transaction based on comparing the total profit from your investment to the total invested cash.

For a rental property, the ROI takes into account the cumulative cash flow, equity accumulation and loan paydown and gives the total return on your invested capital, should you decide to sell the property at a given point in time.

For a flip, the ROI gives the total return on your invested capital after you complete the rehab and sell the property.

 

How Is It Calculated?

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