From 0 to 130 Properties in 3.5 years
Steve McKnight
- Net Profit (what accountants measure)
- Net Profit = Income - Expenses
- Net cashflow (What investors measure)
- Net cashflow = Cashflow received - cashflow paid'
- Return on Investment (ROI)
- ROI(%) = Net profit / Asset value
- Cash on cash return (CoCR)
- CoCR = Net cashflow / Cash outlay
The 11 second solution
- Ascertain the likely weekly rent
- divide likely weekly rent by two
- Multiply by 1000
- Compare the result to the asking price
The 1 percent Rule
- Ascertain interest rate for the load
- Add 1 percent to this rate
- Calculate the target property's ROI
- ROI = Annual rent / Purchase price
- Compare ROI with 1 per cent rule