Stress test your portfolio looking at ROE (return on equity).

That could lead to two problems down the road: 1) Poor cash flow once you refi and/or 2) Terrible Return on Equity (ROE).If you put 75% debt on this property, you'll have a monthly payment of $532, which puts you in the red.

Whenever you get too focused on paying off debt, you should stop and calculate your ROE.

It sounds nice to have a 15% ROI but your ROE goes down.

Assuming you have 20% equity in this place, you're looking at a 3% Return on Equity (ROE).

Even if you don't plan to sell, you do need to understand what your Return on Equity (ROE) is.

As for as the deal, I am looking at a very juicy 19% ROE but a very poor CoC of 1%.

With only $50/month cash flow, your Return on Equity (ROE) must be terrible.

You'll never hit the 1% rule so either it won't cash flow or will have a terrible Return on Equity (ROE), depending on how you structure the debt.

@Micah Hensley I was just thinking about doing this for my rentals. seems like i know the numbers in my head but i never got around to actually putting the numbers down into a spreadsheet. i think i’m just going to start listing categories ex; property, tax, insurance, management fee, rent, current value, purchase price, total rehab, to date repairs, etc. then maybe do a final value for roe. not sure how this will work but maybe i see something when all the numbers are laid out.