Real Estate Return - A Real Example

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
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Total cost: $385,000

Sale Price: $645,000
Sales commission & costs: $28,000
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Net Sale Price: $617,000

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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%.