ROI

[Robert Littke]

Can someone correct me if I'm wrong here:
If I have a property I paid $35,000 for in 1979 and I can sell it today and walk away after closing costs for $300,000
OR I can finance it for 3 years and walk away with $359,400 after payouts. (lets forget taxes for now)
How would you calculate and compare ROI? If I could have $300,000 today, should that number be a part of my initial investment in the 36 month finance calculation? In essence, am I "reinvesting" the $300,000? I hope I'm making sense.

[Jake Kucheck]

Here's what I'm looking at.

359,400 - 300,000 = 59,400

59,400/300,000 = 19.8% over 3 years

19.8%/3 = 6.6% APY

So, if you could do better than 6.6% APY on another investment, then do that (take cash now). If you can't, then take the 6.6% yield (payments).

This is of course before factoring in the risk of this payment stream defaulting, but you didn't give us any terms of your financing, so it is difficult for us to assess risk.