Question: "The Book on Rental Property Investing"

[Anthony Andry]

I am just embarking on my journey in Real Estate and Rental Properties. I've been listening to the podcast over the past couple years and have recently picked up the Bigger Pockets Book, "The Book on Rental Property Investing".

I'm really excited to start investing and I had a couple questions regarding the following:

On Page 54:

Brandon provides an example of our finances one year after the acquisition our first fourplex property:

*Assuming Cash flow is $200/unit/month, Cash Flow = $800*12mo = $9,600 rounded up to $10,000 for simplicity

Property value: $100,000

Purchase Price: $80,000

Down Payment: $16,000 (20%)

Repairs/Improvements: $4,000

After Year One -

Forced + Natural Appreciation: $10,000 (10%)

*Cash Flow: $10,000

After Year One Total Equity:
+$20,000 purchase price

+$16,000 down payment

+$10,000 appreciation

___________________________________

$46,000 [Question 1 - see below]

After Year One Total Net Worth:

+$42,000 Total Equity [*-$4,000 Minor Repairs/Improvements (to obtain the $10,000 appreciation)]

+$10,000 Cash Flow

____________________________________

$52,000 [Question 2]

Questions:

1. The book shows $46,500. I'm assuming $500 went towards principal, but I'm unsure on this. Can someone clarify

2. *The book shows $56,500. Shouldn't we subtract the repair cost from our total equity?

Thanks in advance!

Anthony