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This is a real life example.
Bought June 23, 2002 Sold May 22, 2006 Duration: Four Years
Purchase Price: $325,000 (down payment $85,000) Improvement after purchase: $25,000 Labor input(estatimate): $20,000 Negative cash flow: $15,000 -------------- Total cost: $385,000
Sale Price: $645,000 Sales commission & costs: $28,000 -------------- Net Sale Price: $617,000
============== Net Profit: $232,000
Based on purchase price and costs of $365,000, the compounded anuual return is 13%.
Based on total cash out of $125,000, the compounded anuual return is 30%. |
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