Lets apply a little algebra to this forumla:Cash flow = (rent / 2) - PMT(rate, term, purchase price)to get to a forumla for purchase price.

Don't worry; we're not talking about complicated algebra or calculus here.Instead, we're talking about some straightforward calculations that help you make smart decisions.Crunching the NumbersDoing the math in real estate involves crunching numbers to figure out if a property is a good investment.

How much algebra do you remember from school, despite having taken the class?

Investing in real estate is like skipping classes all quarter long, then trying to take an Algebra test at the end of the term.

. ;-)ChrisA simple algebraic equation involves one variable called a univariate equation.  

So, when you combine the $1 of equity = $5 in property value at the purchase, with the $1 of equity = $1 of appreciation (increase in PV), that increase is actually diluting the value of the equity.Example:1 - Buy property PV = purchase price = $100kDP = initial equity = 20%/$20k2 - Property appreciates 20%PV = $120kEquity = 33%/$40k3a - Keep  propertyEquity = 33%/$40kPV = $120k3b - Sell  property, and reinvestEquity = 20%/$40k (wait,...equity gained from paydown of principle pays closing costs)PV = $200kProperty appreciates 20% for both properties...4a - Still keeping propertyPV (increase $24k) = $144kEquity (increase same $24k) = $64k4b1 - Impact on sold scenarioPV (increase $40k) = $240kEquity (increase same $40k) = $80k4b2 - Sell PV (5 x equity again) = $400kEquity (same as if we didn't sell it) = $80kThis is an exponential return...the most powerful application of algebra that can be applied to REI.These numbers, and the distance between them, grow even wider when you are in a State like California where the equity growth from appreciation is much higher than the example shown here. 

Though they may require some basic knowledge of algebra or math skills. 

HP12-C is the ubiquitous one, like how TI-83s are used by algebra students everywhere, same thing. 

Adam, remember when you were in school taking algebra or trig., or some subject that mey have been a challenge and a student would ask "why am I learning this, I am not going to need this for what I am going to be in life!!"?

This is also the investing wisdom from success investors whom I admire.if you get an "A" in Algebra and Biology in high school, but get an "F" in 5 other subjects, your GPA would be horrible and most decent colleges would not accept you, however this is not the case when you investing in real estate or the financial markets.