Starting Out
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated almost 2 years ago on . Most recent reply
CF and ROI
Correct me in I'm wrong cash flow is calculated through NOI minus the Mortgage (NOI-Mortgage=CF)
And ROI is calculated by dividing CF by the down payment (CF:DP=ROI)
Is all of the above true?
Most Popular Reply
#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
- 16,108
- Votes |
- 10,251
- Posts
#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Quote from @Ali Nurmohamed:
Correct me in I'm wrong cash flow is calculated through NOI minus the Mortgage (NOI-Mortgage=CF)
And ROI is calculated by dividing CF by the down payment (CF:DP=ROI)
CF/acquisition costs is more of a cash on cash (COC) return.
Acquisition costs are more than the DP. Usually a few % in pre-paid interest, insurance, appraisal, inspection, title and escrow fees.
CF / acquisition and improvement costs = COC yr 1. Keep in mind CF can change and be clawed back in future years. Unexpected repairs, turnovers, vacancy or renters not paying.