Hassle-free Cashflow Minute Lesson 2:  How and WHEN to Use ROI
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Hassle-free Cashflow Minute Lesson 2: How and WHEN to Use ROI

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David Campbell, professional real estate investor teaches how and when to solve for ROI, profit, and capital invested. Case studies are used for explaination.

David Campbell, professional real estate investor teaches how and when to solve for ROI, profit, and capital invested. Case studies are used for explaination.

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Hassle-free Cashflow Minute Lesson 2:  How and WHEN to Use ROI Hassle-free Cashflow Minute Lesson 2: How and WHEN to Use ROI Presentation Transcript

  • Hassle-free Cashflow Minute Lesson 2: HOW and WHEN to Use ROI Investor Educational Series by Professional Investor / Developer David Campbell www.HassleFreeCashFlowInvesting.com ©2011 All Rights Reserved
  • Extension of Ideas from LESSON 1ROI = Profit / Capital Invested www.HassleFreeCashFlowInvesting.com
  • Annualized ROI = ROI / Years Also expressed “ROI per year”www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (Annualized ROI = ROI / Years Invested) When to solve for annualized ROI? * apples to apples www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (Annualized ROI = ROI / Years Invested) ROI = 25% Years Invested = 6 months 6 months / 12 months per year = 0.5 years 25% ROI / (0.5 years) = 50% ROI per year www.HassleFreeCashFlowInvesting.com
  • Manipulate the AlgebraROI = Profit / Capital InvestedProfit = ROI x Capital InvestedCapital Invested = Profit / ROI www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (ROI = Profit / Capital Invested)When to solve for ROI? * step prior to annualized ROI www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (ROI = Profit / Capital Invested) Profit = $25 Capital Invested = $100 $25 / $100 = 25% ROI www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (Profit = ROI x Capital Invested)When to solve for Profit? * budgeting* deciding if a deal is worth effort* dividing funds between partners www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: Profit = ROI x Capital Invested ROI = 25% Capital Invested = $100 25% x $100 = $25 profit www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: (Capital Invested = Profit / ROI) When to solve for C.I.?* allocation of investment capital* need based reverse engineering www.HassleFreeCashFlowInvesting.com
  • CASE STUDY: Capital Invested = Profit / ROI ROI = 25% Profit = $25$25 / 25% = $100 Capital Invested www.HassleFreeCashFlowInvesting.com
  • David Campbell $500 million of real estate experience real estate investor / developer houses / apartments retail / office / land / resort condos / condo conversion financial strategistwww.HassleFreeCashFlowInvesting.com