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Updated over 4 years ago,
return on investment calculation
I'm trying to determine my annual CAGR or IRR (not exactly the same but they'll be similar I think)
7 unit apartment building purchased june 2011, sold this coming august, calling it an 11 year holding period to keep it simple
purchase price 172,000 inc. closing costs
i lumped capex into expenses as most were updating kitchens, etc. and ended up being expensed vs. capitalized anyway.
So, total profit over 11 years $152,000 ($16,888 per year avg.) although 5 of the past 6 years, cash flow has been 25K ish.
Our out of pocket, because we only needed to put down 10% was $15,450 (that doesn't jibe with 10% but looking at the HUD I can't figure out why, but inc. escrow that's what we put down)
$340,000 will be the sales price (350K minus a commission of 3%)
What is my annual "return on investment?" I like the IRR method if possible, but CAGR is good too. I just get confused...