When We Do The Numbers-A Mistake

That Donald analysis bothered me all day and finally dawned on me that I did not include the repayment of the loan.  As they say, duh.  It bothered me that Donald was doing so good in his part of the analysis.

So here is the analysis the right way, I think

Income                                            $73,195

Payback of Loan with Loan consisting of Principal of $21,600 (Purchase Price of $27,000-20% Downpayment=$21,600) plus loan to pay renovation cost, taxes, fees and interest of $31,889=Total Loan Repayment of                  

                                                         $53,489

Net Gain                                        $19,706=ROI of 37% or 8.2% per annum over 4.5 years

Will look at this again in the morning light but does go to show, again, that you can make money at real estate but it is not as easy as the guys would make it look in the infomercials.  And glad I don't have to do financial analysis for a living anymore.

Comments

[Caitlin]

Good series, Bill...I finally got caught up :)