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Return on capital - ROE

Hi friends, first round of posts with a value of 3 out of 3. So in the previous two posts I explained what ROI is which is actually the return of an investor (or any other entity) on new investments regardless of how the investment is financed and before taxes, and I explained what ROA is actually The return that the total assets of an investor created regardless of the manner of financing…

When making a flip in the market (buying and selling for an investor from around the world) it's important to get a maximum price. how to make…

When doing a flip in the market (buying and selling at a profit to an investor from the world) it is important to get a maximum price. How do you do that? Quite a few ways. Sometimes the pictures play a crucial role as much as the renovation. Here's a property that would have looked like an even worse dumpster. When we put it on the market this morning (for sale in the US market) and already this evening they came to see it. Those who know me well know that knocking...

Return on investment - ROI

Hi friends, first round of posts with a value of 1 out of 3. I want to hone some financial relationships that a lot of investors from a lot of fields use and sometimes make a little salad. The first financial ratio is ROI (return on investment) or in Hebrew return on investment. Another name for this ratio is ROIC (Return on investment capital) or in Hebrew return on capital…

Responses

  1. Let's say you purchased a property for 120k and let's say you brought cash to the deal 30k and the rest in financing. Let's also assume that the net flow after expenses is $500 per month. What is obtained is that the NOI is the annual flow (500×12) that is 6k divided by the money the investor brought from home, that is 30k. Hence - NOI=20%
    The ROI is the net cash without taxes from the property only this time it is divided by the total price of the property, for example in our example the price of the property is 120k. But here there is no reference to financing and therefore the mortgage repayment is not calculated in the annual cash flow.