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A negative cash flow, cash yield, or Internal Rate of Return (IRR) in the Residential ProForma spreadsheet indicates that the real estate investment may not be profitable. Negative cash flow means that the expenses are higher than the income generated by the property. A negative cash yield suggests that the return on investment is negative, meaning the investor is losing money on the investment. A negative IRR indicates that the present value of future cash flows is less than the initial investment, suggesting a loss on the investment.
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Liquid and non-liquid gains were split instead of included collectively since liquid assets can be pulled out at any given time, as opposed to non-liquid assets that are tied into the property until sale. This tells you how much revenue you'll receive without the need to rely on non-liquid assets. Projected sales price provides the full number. If the cash flow, cash yield, or IRR are negative, they will show up as red.
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Need to compare real estate investment opportunities? Use the Residential ProForma spreadsheet to quickly identify if a real estate investment opportu...
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