Review of investment worksheet

[Karl Sivert Skatland]

I am trying to create an investment worksheet that will give me a quick overview of a potential property investment. My question is how do I account for the principal paid on the mortgage? The worksheet is attached in the link below - any feedback is appreciated.

https://www.dropbox.com/s/urz8bgzjpj5krvl/Investeringskalkulator.xls?dl=0

[Christopher Cruz]

Return on investment is an absolute return, i.e, a multiple of your original investment. What you are attempting to calculate is cash on cash return and an internal rate of return. Together, these 3 calculations will form the basis of analyzing an investment property. Try something like this for each year, model number of years you intend on holding i.e 3, 5, 7, 10, etc.

+PGI
-Vacancy
=EGI

Operating Expenses:
-Insurance
-RE Taxes
-Prperty Management
-Utilities
-Other Operating expense

NOI = EGI - Operating Expenses

Mortgage Payments:
-Principal
-Interest
CF after Debt Service

CapEx
-Capital Expenditures
CF after CapEx

-Purchase/+Sale
+Financing/-Paydown of remaining balance upon sale
Net Cash Flow

Calculate your returns off of Net Cash flow.

Returns:
Levered CoC: Year X CF/Equity Invested
ROI: Equity Invested/Total CF Distributions, including sale
IRR: Use excel function to calculate (=IRR(equityinvested, Year 1 CF, Year 2 CF, etc.)

Compare return metrics to other investment opportunities and pursue accordingly. 

Hope this helps, message me with any questions.