Learn the math behind solving for "return on investment". Real estate investing can be profitable AND hassle-free. To learn more, you can watch a video of this presentation at: http://hasslefreecashflowinvesting.com/investor-education-videos/

1. 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

2. Extension of Ideas from LESSON 1
ROI = Profit / Capital
Invested
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3. Annualized ROI =
ROI / Years
Also expressed “ROI per year”
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4. CASE STUDY: (Annualized ROI = ROI / Years Invested)
When to solve for
annualized ROI?
* apples to apples
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5. 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
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6. Manipulate the Algebra
ROI = Profit / Capital Invested
Profit = ROI x Capital Invested
Capital Invested = Profit / ROI
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7. CASE STUDY: (ROI = Profit / Capital Invested)
When to solve for ROI?
* step prior to annualized ROI
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8. CASE STUDY: (ROI = Profit / Capital Invested)
Profit = $25
Capital Invested = $100
$25 / $100 = 25% ROI
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9. CASE STUDY: (Profit = ROI x Capital Invested)
When to solve for Profit?
* budgeting
* deciding if a deal is worth effort
* dividing funds between partners
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10. CASE STUDY: Profit = ROI x Capital Invested
ROI = 25%
Capital Invested = $100
25% x $100 = $25 profit
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11. CASE STUDY: (Capital Invested = Profit / ROI)
When to solve for C.I.?
* allocation of investment capital
* need based reverse engineering
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12. CASE STUDY: Capital Invested = Profit / ROI
ROI = 25%
Profit = $25
$25 / 25% = $100 Capital Invested
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13. David Campbell
$500 million of real estate
experience
real estate investor / developer
houses / apartments
retail / office / land / resort
condos / condo conversion
financial strategist
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