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the cash flow we are already getting. This $360,000 is an infinite return,
measured by cash flow in hand, not some fictitious capital gain on paper.
In summary, the bank puts up 100 percent of the money for these
improvements and we receive the increase in income. The tenants pay for
expenses and the mortgage.
3. IRR: Internal rate of return. One of the more complex, sophisticated,
and often confusing measures of ROI is the internal rate of return. If
investors really know what they are doing, they can increase their ROI by
understanding IRR. The following diagram explains as simply as possible
this more advanced way of measuring true investor returns.
