Question about the BP 4 Square Method

[Elyse N.]

I am creating a Google Spreadsheet that effectively calculates ROI for me. I am using the BP 4 square method.

My question is, should the "Total Investment" number be the purchase price or the down payment? I will be paying the mortgage off myself and there are no additional investors.

Also, has anyone created a similar tool for themselves? Have any advice?

[Chris Eaker]

@Elyse N. I got it. It's just the typical rental property analysis arranged into 4 quadrants. The total investment is the total amount of cash you have invested in the property. It does not include the loan amount because you did not contribute that, the bank did. You see Brandon shows down payment + closing costs + rehab costs + other misc expenses = total investment. Divide this number into your annual cash flow (total income - total expenses [including your mortgage payment]) x 100% and you get Cash on Cash return. Make sense?