Real Estate Investing: Focus on the ROI
When you're investing in real estate, keep your eye on what's important: your Return On Investment (ROI).
The interest rate, the purchase price, the sales price, your repair costs -- all these numbers are important, but incidental. What matters most is your ROI, or how much you'll make for each dollar you invested.
Calculate your ROI on the cash you had to put into the deal. For example, let's say you bought a property for $150,000 with $5,000 down, then sold it for $200,000. Your profit is $50,000; your cash investment was $5,000. That means your ROI is 1,000 percent!
When you do a no money down deal, your ROI is infinite -- you can't calculate it.
Keeping your focus on the ROI is how you keep your money working hard for you.