How do i calculate the profit in % when buying a house.. see example below?

Question

the buying price is 1,000,000 and the selling price is 1,500,000 - what is my profit in the form of % ? Please write the formula.. thanks

Answer 1

http://www.irs.gov/publications/p523/ar0...

Answer 2

first thing is this.... how did you come up with the buying price and the selling price =)  

you should always go by the ARV (after repair value) then calculate what you want to offer based on YOUR profit margin (make sure to include margin of error)

for investing

ARV 55% (if your going to live - go with 65-70%) - repairs - 5% closing cost - 2% margin - PROFIT = OFFER PRICE

1MIL ARV - 20K REPAIRS, 20K PROFIT = OFFER PRICE OF 472K (your probably saying your crazy no one will take that BUT you'll be surprised =P )

Answer 3

Its very easy. If you have the principle amount, rate of interest per year, selling price etc.. then you have the answer in your finger tips.

As you have mentioned you have invested 1,000,000 which is principle amount or your capital amount. You sold your house for 1,5000,000. Your gross profit is 5000,00. As you have not mentioned any expenses in between and you want the profit only in the form of % i will straight away give you the formula and the % of profit.

for a 1,000,000 invest ment your profit is 500,000.

suppose for 100 invest ment what is the profit.

% profit = (profit / Capital investmet) x 100

              =(500,000/1,000,000) x 100

              =50%

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