- #1
adamaero
- 109
- 1
- Homework Statement
- What is the return?
- Relevant Equations
- NOI/(downPayment+rehab)
Say the annual return for a *used* widget producing machine is this:
`12*500/(5000+15000)` = 30%
It cost 5k for the loan to buy the machine and 15k to fix it to start.
Two years later, it is refinanced for a 30 year term. Is that initial 15k still in the denominator? What if it was refinanced two seconds later?
`12*600/(33000+15000)` = 15%
I am trying to determine the overall (average) return of an investment with a great return in the first two years, but a mediocre return for the rest of the new loan.
`(2*30% + 30*15%)/32` = 16% average
`12*500/(5000+15000)` = 30%
It cost 5k for the loan to buy the machine and 15k to fix it to start.
Two years later, it is refinanced for a 30 year term. Is that initial 15k still in the denominator? What if it was refinanced two seconds later?
`12*600/(33000+15000)` = 15%
I am trying to determine the overall (average) return of an investment with a great return in the first two years, but a mediocre return for the rest of the new loan.
`(2*30% + 30*15%)/32` = 16% average