Using "Net Present Value" to analyze deals

[Seti Gershberg]

Does anyone calculate net present value to compare wholesaling vs. flipping vs. rental/BRRRR deals?

If so, do you have a spreadsheet or anlaysis tool?

[David Gonzalez]

NPV is a powerful tool and is a great way to compare investments. The problem I have is taking the time to build the model and determining the proper discount rate (this is a big one and it's more complicated then it's made out to be). For wholesaling and Flipping I would never use NPV since I would be in and out quickly. Internal Rate of Return would be the calculation that would be the more appropriate to use (especially for flipping) but even then I would only use it to show off what I could do and not use it to evaluate deals and where to invest. BRRRR you are bootstraping. What is important is just doing it and turing over the profits. For buy and hold NPV would only be useful if you have lots of money to play with and you are looking to optimize your portfolio. If you are starting out your time and money is better spent finding the deals or improving the property.