All Forum Posts by: Trey Leigh

Now to find another.

Susan I ran the numbers through an IRR calculator and got what you did. Interesting that what I saw as a 9% COC return on investment is not the same as a 9% IRR return compounded. So this is a tool to compare an investment with the same money compounded over the life of the investment.

Susan, do you have a calculator to share, or are you saying you can analyze a potential deal for me?

@Susan Gillespie

Thanks for the reply. The expenses included Taxes, Insurance, Vacancy (1 month), Maintenance reserve of 10%, etc. So I think they are fairly conservative. I'm surprised it's only 15%, with a COC return of 9% plus the return based on equity buy down that @Frank M. mentioned which was around 10% I would of thought it was higher....I'm still learning this IRR stuff and typically look at CoC return only when we buy. The rest is just gravy I guess if your happy with that. I look forward to learning more about it however, it gives a better "big picture" analysis of an investment.

Thanks for the post!

Thanks for the clarification!

Frank I'm not following, 12000 invested at 10% should earn 1200/year multiplied times 15 years is $18000 right? Unless it's compounded yearly, is that what your saying?

Thanks for the reply

I was looking at some of my spreadsheets and was trying to figure my overall rate of return on a house once it is paid for in the future, with the following assumptions, are my calculation right?

Purchase price 50,000

Sales Price 50,000 (after 15 years assuming no appreciation)

Initial investment 12000 (20% down and 2000 Closing)

CoC return of 9% or $1091/year after all expenses

After 15 years the house is paid for and I sell it for 50,000

Is this how I calculate my ROI of my initial investment?

16365(15 yrs. @ 1091) + 50000 - 12000 = 54365/15 yrs. = 3624/yr.

3624/12000 (initial investment) = .30 or 30%/year ROI?

How about 54365/12000 means my money grew 4.53x or 453% in 15 years?

Sure looks good ;)

I was thinking about this, but keep in mind that your 401k is pre-tax money, when you borrow it you're paying it back with post tax money. Then when you are retired and begin receiving disbursements from your 401k, it is again taxable. So you'll pay income tax twice on the borrowed money if my due diligence is correct.

401kcalculator.org

those are good looking rentals, is that in Lawton?

Thanks Chris, that's good info. I think it's an upside more than down, based on my limited knowledge.