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Updated over 5 years ago,
So what's your investment formula???
Hello,
I am a investor that has become a Realtor. I feel like I am very conservative when I run the numbers on a property.
Example
A=$1200.00 Properties monthly income
B=$220.00 Monthly operating costs (property management, grass, and bug services)
C=$700.00 The total cost of mortgage; monthly with insurance
A-B-C=Gross monthly profit
or $1200-$220-$700=$280 of Gross monthly profit
$280*12 months= $3360 of Gross annual profit
Gross annual profit-1 month rent for cap X (A)= Estimated net profit
$3360-$1200=$2160 Annual net profit/Annual cash flow
$2160/12 months=$180 of Net monthly profit/monthly cash flow
OK, how is this equation similar or different from what other investors are using? I am interested because I work with a lot of investors, and it seems like everyone has their own calculations that they use. I am also interested in what is considered a good investment in terms of returns for you as an investor? I wish I had the ability to create a poll on here so I could create a better understanding of what investors really want. Because everyone says, they want 10%+ return, but what are you really comfortable with? Thank you for your time, those who are still reading.