Returns as reported in our analyses are not inclusive of appreciation as we still deem that element of the investment property to be speculative.  (Real estate, however, has doubled in value every 20 years in America since 1776).  Returns from monthly principal paydown and tax savings are also not included in the original cash flow or return on capital figures in our analyses.

Return Calculations:

Assumptions:

After Repair Market value of Home (ARV):

Purchase Price of the Home:

20% Down:

Cost of Rehab:

Closing Costs:

Cash on Cash Return:

 

$339 Monthly Cash Flow x 12 = $4,068

$4,068/$34,600 = 11.76% Annual Cash on Cash return

11.76% Return = 18.25% Tax Equivalent Yield for a NYC Resident Taxpayer

in the 28% Tax Bracket

Return on Capital:

  ARV  –     Purchase Price  –  Repairs  =                        Equity Captured

                                                                  (Unrealized Capital Gain upon Purchase)

117,000     80,000      15,000                           22,000

$22,000 Equity Captured / $34,600 Invested Capital = 63.58% Return on Capital

AFFILIATED WITH GREAT REAL ESTATE, INC.

GREAT REAL ESTATE, INC. IS THE SPONSORING BROKER

FOR PASSIVE INCOME PROPERTIES

GREAT REAL ESTATE, INC. IS A LICENCED REAL ESTATE BROKER

IN THE STATE OF TEXAS, LICENSE #0554753

Returns

$117,000

80,000

16,000

15,000

3,600

  Monthly Rent -

1,150

Principal and Interest -

423

Taxes -

207

Insurance -

66

Management Fee

115

=  Monthly Cash Flow

339