💰 Return on investment (ROI) is the percentage of your total investment in a property you can expect to receive in a year. For example, if your ROI is 10 percent, you can expect to receive 10 percent of your investment back in 1 year. If you invested $100,000 into a deal, you could receive $10,000 in 1 year. This is calculated by multiplying the invested amount ($100,000) by 10 percent (.10), which equals $10,000. ROI only refers to cash flow (the investment property’s net income) after accounting for all associated income and expenses. Other income factors in real estate, like appreciation, paying down debt, and many more, are not considered and calculated when describing ROI. We are only talking about the cash flow portion of your profit and nothing else. ROI in real estate is also called a “cash on cash” return. You develop a “cash on cash” return by dividing your yearly profit by your invested money, known as your basis, which includes all your expenses such as the down payment, ...