Yes, I didn't factor the appreciation part

来源: Wisdom101 于 2008-07-18 09:43:00 [] [旧帖] [给我悄悄话] 阅读数 : 0 (884 bytes)
回答: it is not a good deal, 由 Wisdom101 于 2008-07-18 05:23:47

in my calculation, 1% appreciation adds about 2.71% IRR. BTW, IRR calculation factor the principal paid by your tenant. Here is the new calculation for different HPA:

0% HPA 1% HPA 2% HPA 3% HPA 4% HPA 5% HPA 10% HPA
Year IRR IRR IRR IRR IRR IRR IRR
1 -19.53% -13.90% -8.55% -3.45% 1.41% 6.07% 26.78%
2 -5.38% -0.21% 4.49% 8.80% 12.78% 16.48% 31.85%
3 -0.67% 4.07% 8.22% 11.93% 15.26% 18.31% 30.45%
4 1.67% 6.01% 9.72% 12.94% 15.81% 18.38% 28.38%
5 3.05% 7.05% 10.37% 13.22% 15.72% 17.95% 26.43%
6 3.96% 7.64% 10.65% 13.19% 15.40% 17.35% 24.70%
7 4.59% 7.99% 10.73% 13.02% 15.00% 16.73% 23.20%
8 5.05% 8.20% 10.70% 12.78% 14.57% 16.12% 21.89%
9 5.41% 8.32% 10.62% 12.52% 14.14% 15.55% 20.74%
10 5.68% 8.39% 10.51% 12.25% 13.73% 15.01% 19.73%

Yes, if you factor the future appreciation greater than 2% a year, 125K is a good investment.

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