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User Stats

8
Posts
7
Votes
LaToya McClain
  • Gautier, MS
7
Votes |
8
Posts

Rental Property calculator- Total profit if sold?

LaToya McClain
  • Gautier, MS
Posted

In an effort to get accustomed to the rental property calculator tool, I ran the analysis for 2 different properties.  The math makes sense for all of the calculations but the total profit if sold.  Since I couldn't get the numbers to make sense, I watched Brandon's youtube video (https://www.youtube.com/watch?v=xqVF-_hkhfk) introducing the total return feature and the article here (https://www.biggerpockets.com/renewsblog/2016/05/2...).  The article states the following:  

Total Profit if Sold: This is the profit you would make on the property if you sold it. It is computed by taking the After Repair Value in that given year, subtracting out all the sales expenses (the percentage you entered on the bottom of page 3), subtracting out the mortgage balance, subtracting out any money you put into the deal, and adding in all the combined cash flow since you purchased the property.

Even when I worked the calculations along with Brandon on the youtube video, the Total Profit if Sold value never equals the correct number.  I must be doing something wrong, so if anyone can shed some light on this I would appreciate it.  

User Stats

359
Posts
143
Votes
Austin Youmans
  • Investor
  • Vancouver, WA
143
Votes |
359
Posts
Austin Youmans
  • Investor
  • Vancouver, WA
Replied

So in brandons video I ran the numbers for year 1 and it seems to work out for me.

ARV - sales expences - total cash needed - loan balance + cash flow

(121,200 X 90%) - 25,132.5 - 37,685.67 + 2,162.99 = 48,424.8

Total return = 48,424.8/25,132.5 = 1.92 = 192 %

Let me know If you have any questions

User Stats

8
Posts
7
Votes
LaToya McClain
  • Gautier, MS
7
Votes |
8
Posts
LaToya McClain
  • Gautier, MS
Replied

@Austin Youmans thank you for the breakdown. I was making a very silly mistake. This is what I was doing:

121,200 - (121,200 x 10%) - 25,132.5 - 37,685.67 + 2,162.99

Makes a huge difference. I appreciate the help. 

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