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28-Nov-2014
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## Real Estate

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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.

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

• 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 1ROI = Profit / Capital Invested www.HassleFreeCashFlowInvesting.com
• 3. Annualized ROI = ROI / Years Also expressed ROI per yearwww.HassleFreeCashFlowInvesting.com
• 4. CASE STUDY: (Annualized ROI = ROI / Years Invested) When to solve for annualized ROI? * apples to apples www.HassleFreeCashFlowInvesting.com
• 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 www.HassleFreeCashFlowInvesting.com
• 6. Manipulate the AlgebraROI = Profit / Capital InvestedProfit = ROI x Capital InvestedCapital Invested = Profit / ROI www.HassleFreeCashFlowInvesting.com
• 7. CASE STUDY: (ROI = Profit / Capital Invested)When to solve for ROI? * step prior to annualized ROI www.HassleFreeCashFlowInvesting.com
• 8. CASE STUDY: (ROI = Profit / Capital Invested) Profit = \$25 Capital Invested = \$100 \$25 / \$100 = 25% ROI www.HassleFreeCashFlowInvesting.com
• 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 www.HassleFreeCashFlowInvesting.com
• 10. CASE STUDY: Profit = ROI x Capital Invested ROI = 25% Capital Invested = \$100 25% x \$100 = \$25 profit www.HassleFreeCashFlowInvesting.com
• 11. CASE STUDY: (Capital Invested = Profit / ROI) When to solve for C.I.?* allocation of investment capital* need based reverse engineering www.HassleFreeCashFlowInvesting.com
• 12. CASE STUDY: Capital Invested = Profit / ROI ROI = 25% Profit = \$25\$25 / 25% = \$100 Capital Invested www.HassleFreeCashFlowInvesting.com
• 13. 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