Return on Equity Quadrant™

Cash Flow Power Meter™

The Cash Flow Power Meter™ is a new way to evaluate rental property cash flow. It presents information we might otherwise see in a Return in Dollars Quadrant™, Return on Equity Quadrant™ or Return on Investment Quadrant™ in a new, simple and powerful way. Before I start explaining what the Cash Flow Power Meter™ is and how we use it, I want to say: if you invest in a real estate market that has positive cash flow, you should absolutely be buying properties with positive cash flow. The need for the Return in Dollars Quadrant™, Return on Equity Quadrant™ and … Read more

Return on Equity Quadrant™

The Return on Equity Quadrant™ is the amount, in dollars, of each of the four primary returns in a real estate investment divided by the current equity in the property. The four primary areas of return are: Appreciation Cash Flow Cash Flow from Depreciation Debt Paydown We typically display this graphically as: Or, with some numbers filled in like this: The Return on Equity Quadrant™ is automatically calculated for you at the bottom of the page when you’re editing your  Property assumptions. Just scroll to the bottom. Check it out for yourself by editting one from your Properties page. If … Read more

Return on Investment Quadrant™

The Return on Investment Quadrant™ is the amount, in dollars, of each of the four primary components of returns in a real estate investment divided by the initial investment (also known as the total cost to close). The four primary components of return are: Appreciation Cash Flow Cash Flow from Depreciation™ Debt Paydown We typically display this graphically as: Or, with actual numbers like this: The Return On Investment Quadrant™ is automatically calculated for you at the bottom of the page when you’re editing your  Property assumptions. Just scroll to the bottom. Check it out for yourself by editting one … Read more