ROI questions

[Dale Line]

I would like some insight into calculating returns on real estate projects. I started investing several years ago in condos that rent out with a positive cash flow. I bought units that support higher prices post rehab because of what other upgraded units trade for in the building. I remember David Bach saying the beauty of real estate is the high ROIs because you generally put less down than if you were buying other investments, such as a stock. I've run general numbers on one of my units, and the potential ROI seems decent - - am I doing this right?

First the ROI calculation I'm using is:
ROI=((payback-investment)/investment) x 100

Here's the basics on the purchase of the condo
$300,000 purchase price
$15,000 down payment (closing costs picked up by seller)

Simple ROI Calculation #1 based on original investment
$400,000 sale price (based on upgraded comps)
- $20,000 commission
- $35,000 rehab/carrying costs during rehab
- $300,000 original price
= $45,000 profit payback

so, ROI = ((45,000 - 15,000)/15,000) x 100 = 200% return.

Or is it better to calculate based on all money I've put it:

$400,000
- $20,000 closing costs
- $300,000 original price
= $80,000 payback

$50,000 investment for down payment, rehab, carrying costs

ROI = ((80,000 - 50,000)/50,000) * 100 = 60%

Am I on track? (I've excluded taxes for 1031 reasons). I also know the condo market is sluggish, and this isn't something I plan on doing until that market gets some traction again. Thoughts?