Hassle-free Cashflow Minute              Lesson 7:     Arbitrage and Yield Spread        Investor Educational Series by   ...
Arbitrage is the investmentstrategy of borrowing money to        invest for a profit.       Yield spread is the      mathe...
Yield Spread = earning rate - cost of funds2% Y.S. = 7% earning - 5% borrowing       www.HassleFreeCashFlowInvesting.com
Case Study:      $100,000 house @ 7 CAP  purchased w/ 80% financing @ 5%WHAT IS THE ROI FROM CASHFLOW?    www.HassleFreeCa...
Case Study:     $100,000 house @ 7 CAP = $7,000 NOI $80,000 mortgage @ 5% = $4,000 interest exp.                $3,000 pro...
David Campbell              $500 million of real estate                    experience            real estate investor / de...
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Hassle-free Cashflow Minute Lesson 7: Arbitrage and Yield Spread

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David Campbell, professional real estate investor and developer gives the definition of arbitrage and yield spread. Learn how to calculate yield spread and your return on investment on cashflow.

Published in: Real Estate
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Hassle-free Cashflow Minute Lesson 7: Arbitrage and Yield Spread

  1. 1. Hassle-free Cashflow Minute Lesson 7: Arbitrage and Yield Spread Investor Educational Series by Professional Investor / Developer David Campbell www.HassleFreeCashFlowInvesting.com ©2011 All Rights Reserved
  2. 2. Arbitrage is the investmentstrategy of borrowing money to invest for a profit. Yield spread is the mathematical result. www.HassleFreeCashFlowInvesting.com
  3. 3. Yield Spread = earning rate - cost of funds2% Y.S. = 7% earning - 5% borrowing www.HassleFreeCashFlowInvesting.com
  4. 4. Case Study: $100,000 house @ 7 CAP purchased w/ 80% financing @ 5%WHAT IS THE ROI FROM CASHFLOW? www.HassleFreeCashFlowInvesting.com
  5. 5. Case Study: $100,000 house @ 7 CAP = $7,000 NOI $80,000 mortgage @ 5% = $4,000 interest exp. $3,000 profit15% ROI = $3,000 profit / $20,000 capital invested www.HassleFreeCashFlowInvesting.com
  6. 6. 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

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