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February 12th, 2012, 10:03 AM   #1
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Percent Change Question

This is to calculate immediate equity capture by flipping a house.

Percent change is calculated by (B-A)/A * 100

However, in the current application I would like to use it for it results in a negative number every time.

For instance, let's say you are flipping a house.
It's worth 100,000 and you spent 70,000 on it. What was the percent change?

To get the right value, 30%, you have to do (70,000-100,000)/100,000 * 100 = -30%. In other words, you gained 30% equity by flipping this house.

The number is correct, but I don't want a - value.
moreyS is offline  
February 12th, 2012, 10:34 AM   #2
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How is "immediate equity capture" defined?
skipjack is offline  
February 12th, 2012, 12:10 PM   #3
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Re: Percent Change Question

Equity capture is the percent change of what you spent on the house, compared to its repaired value.

In this scenario you spent 70k to buy the property and rehab the house. The house is now worth 100k, thats a 30% difference.
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February 12th, 2012, 08:31 PM   #4
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Re: Percent Change Question

I don't get what you're trying to do. If you spent $70K an it's now worth $100K, that's not a 30% difference. It's 30% of the new value, not of what you originally put into it. The percentage of a change is the change on an original value, not on the new value. Your percent increase is 30/70, not 30/100. That's an approximate 43% increase over what you spent.

The only meaning in this is that the original cost was 30% lower than its new value, but that's not a "percent change."
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