When to begin REI Calculations from Primary Residence to Rental

[David Jensen]

Hello BP!

[I originally posted this question in another forum, but think it might have been slightly off-topic as I didn't receive any replies.  I am trying again here.

@Dan Heuschele, i didn't want to risk high-jacking the other post, so wanted to say thanks for your previous comments and start the conversation here. Feel free to provide any thoughts you wish.]

 I'm in the process of determining the best course of action on my rental property, but to make the most informed decision I need to know how/when to calculate my ROI, Cash on Cash Return, etc. I am utilizing Frank Gallinelli’s “What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures” GREAT book, especially for the math challenged like myself.

However I'm struggling with the start point of doing the math. I don't want to inadvertently skew the numbers.

As background, my rental property was originally my primary residence. I bought at the peak in 2006, immediately became underwater on my mortgage with the rest of America after the crash. I was assigned overseas in 2012, so refinanced my house before I left, and ultimately converted it into a rental property, figuring, naively, as long as the rental payment was larger than my mortgage payment I was good to go!

So when doing the math…Do I consider the original 2006 down payment costs and years of primary residence as part of the calculus on current ROI/ Cash on Cash return, etc…or ONLY the numbers associated with the REFI in 2012 when I converted the primary residence to rental property?

I can provide the actual numbers, but think the fundamental question doesn't require the actual numbers..if i'm wrong i will provide the numbers ASAP.

I anticipate providing all the numbers under another topic as i am currently barely breaking even on rental payments to mortgage payments and am deciding what to do with my rental property to potentially make a silk purse out of this sow’s ear.

Thanks in advance if you can help me with what i'm assuming is a pretty fundamental question.