Updated almost 2 years ago on . Most recent reply
"Real Estate by the Numbers" Math question
This is for those of you that read the book (as I'm on my 2nd time through). Of course anyone can chime in.
1) 341-343,Chapter 42. It says "Profit = sales price - purchase price - expenses" Even on the levered fix-and-flip deal example it gives the full purchase price. But if you're financing 20% down on $100k (like the book says) isn't your "purchase price" only $20k? Instead of $200k-$100k-$60 expenses, shouldn't it be $200k-$20k-$60k expenses??
2) On the second 'Hone Your Skills' bullet point, I'm getting an answer of $57000, not $63k like the back of the book says.
$400000-250000=200000. Expenses total up to $93k. 200k-93k = 57k. So where is the $63k solution coming from?
It's a great book and I've learned a lot from it. I'm just hanging up on these. As it says on p.344 "make sure your assumptions are sound..." Thank you to J. Scott and Dave Meyer for writing it.