Financing & ROI based on ARV (BRRRR refinance).
| Year | Property Value | Equity Gained | Cumulative Equity | Appreciation ROI |
|---|---|---|---|---|
| 1 | $226,600 | $6,600 | $6,600 | ∞ |
| 2 | $233,398 | $6,798 | $13,398 | ∞ |
| 3 | $240,400 | $7,002 | $20,400 | ∞ |
| 4 | $247,612 | $7,212 | $27,612 | ∞ |
| 5 | $255,040 | $7,428 | $35,040 | ∞ |
| 5-yr Total | $255,040 | $35,040 | $35,040 | ∞ |
Equity gained each year is compounded on the prior year's value starting from ARV ($220,000). Appreciation ROI = equity gained ÷ total cash out of pocket (-$6,500).
| Year | Principal Paid | Cumulative Paydown | Loan Balance | Paydown ROI |
|---|---|---|---|---|
| 1 | $1,703 | $1,703 | $174,297 | ∞ |
| 2 | $1,831 | $3,535 | $172,465 | ∞ |
| 3 | $1,968 | $5,503 | $170,497 | ∞ |
| 4 | $2,116 | $7,619 | $168,381 | ∞ |
| 5 | $2,275 | $9,893 | $166,107 | ∞ |
| 5-yr Total | $9,893 | $9,893 | $166,107 | ∞ |
Paydown ROI = principal paid that year ÷ total cash out of pocket (-$6,500).
| Year | Interest Paid | Depreciation | Total Deductions | Tax Savings | Annual ROI |
|---|---|---|---|---|---|
| 1 | $12,704 | $4,364 | $17,068 | $6,255 | ∞ |
| 2 | $12,576 | $4,364 | $16,940 | $6,209 | ∞ |
| 3 | $12,439 | $4,364 | $16,803 | $6,158 | ∞ |
| 4 | $12,292 | $4,364 | $16,655 | $6,104 | ∞ |
| 5 | $12,133 | $4,364 | $16,497 | $6,046 | ∞ |
| 5-yr Total | $62,144 | $21,818 | $83,963 | $30,772 | ∞ |
Annual ROI = (total deductions × combined tax rate 36.65%) ÷ total cash out of pocket. Avg yearly tax savings = (5-yr total deductions ÷ 5) × combined rate. Depreciation uses 27.5-yr straight line on 80% of purchase price.
Rent $1,200/mo
| Year | Cash Flow | Debt Paydown | Tax Savings | Appreciation | Total Return | ROI |
|---|---|---|---|---|---|---|
| 1 | -$6,278 | $1,703 | $6,255 | $6,600 | $8,281 | ∞ |
| 2 | -$6,278 | $1,831 | $6,209 | $6,798 | $8,560 | ∞ |
| 3 | -$6,278 | $1,968 | $6,158 | $7,002 | $8,851 | ∞ |
| 4 | -$6,278 | $2,116 | $6,104 | $7,212 | $9,155 | ∞ |
| 5 | -$6,278 | $2,275 | $6,046 | $7,428 | $9,471 | ∞ |
| 5-yr Total | -$31,388 | $9,893 | $30,772 | $35,040 | $44,318 | ∞ |
Total Return = cash flow + principal paydown + tax savings + appreciation. ROI = total return ÷ total cash out of pocket (-$6,500). Annualized ROI = 5-yr total ROI ÷ 5.
Rent $1,600/mo
| Year | Cash Flow | Debt Paydown | Tax Savings | Appreciation | Total Return | ROI |
|---|---|---|---|---|---|---|
| 1 | -$2,198 | $1,703 | $6,255 | $6,600 | $12,361 | ∞ |
| 2 | -$2,198 | $1,831 | $6,209 | $6,798 | $12,640 | ∞ |
| 3 | -$2,198 | $1,968 | $6,158 | $7,002 | $12,931 | ∞ |
| 4 | -$2,198 | $2,116 | $6,104 | $7,212 | $13,235 | ∞ |
| 5 | -$2,198 | $2,275 | $6,046 | $7,428 | $13,551 | ∞ |
| 5-yr Total | -$10,988 | $9,893 | $30,772 | $35,040 | $64,718 | ∞ |
Total Return = cash flow + principal paydown + tax savings + appreciation. ROI = total return ÷ total cash out of pocket (-$6,500). Annualized ROI = 5-yr total ROI ÷ 5.