Newbie needing help with Bigger Pockets Rental Calculator

[Sammy Patel]

Does the rental calculator on Bigger Pockets take into account the equity in the property when calculating ROI? It seems the ROI on the calculator is based on cash flow and cash put in. But if I wanted a ROI including the actual equity in the property as well as the cash flow, it does not seem to tell me that, why?

If this is the wrong place for this question please let me know.

[Sammy Patel]

Thank you for your response. So in theory I would want to walk away from this deal since the COC ROI is close to 2% even though we would buy it $45,000 below market value today?

I understand the cash flow part and it makes total sense, but to walk away from $45K equity (understanding it isn't real until we sell) is hard to swallow. If for example we sold next year, we would have that $45K in equity minus selling costs coming to us. Let's say it ends up being $30K after selling costs. That would be $2,500/month I walked away from not including the 2% COC ROI (Using BRRRR). That is a full pay check for some.

Thanks for responding to my posts as I am new and still trying to understand the business. Much appreciated!