The ROI Quiz

Net Profit is $46,000.
Total Investment is $183,000.
It took 210 days.

What is the annualized ROI? *

25%

44%

173%

$325,000 Invested
$75,000 profit
350 days
What is the Annualized ROI? *

23%

24%

28%

Question 1 had $46,000 profit and a 44% annualized ROI.
Question 2 had a $75,000 profit and a 24% annualized ROI.
Which deal would you rather do? *

I'd take the 46k and the 44% return because I want to maximize my ROI.

I'd take the 75k because deals are hard to come by. I can live with a little less ROI.

Does the MAO rule rely on Deal ROI or Annual ROI? *

Deal

Annual

Let's talk about Return on Cash, ROC.
Loan amount: $215,000.
Cash out of pocket for down-payment, points, and interest payments over 6 months: $52,000
Total Investment: $267,000
Net profit after expenses, $82,540.
Hold time 183 Days
What is the annualized ROC? *

62%

31%

159%

317%

This deal was a dumpster fire. Budget overruns galore, multiple problems with contractors, and extraordinarily long hold time. You are completed frustrated with the results. Here they are:
Total Invested: $183,000
Total Cash out of pocket: $42,000
Net Profit: $11,000
Hold Time: 410 days
Can you console yourself with the annualized ROC? Well, what is it? *

41%

23%

FlipStarter: Learn How To Flip Houses

The ROI Quiz