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Rate of Return on No Money Down
(and Other Tales from the Deep Woods)
By Frank Gallinelli
We frequently hear a question that goes something like this: "I'm considering the purchase of an income property where the seller will take back a second mortgage for the entire down payment. Why can't your software figure out the rate of return on a zero-cash-down investment?"

You've surely heard the excuse, "It's not the software's fault" more times than you care to recall. This time, however, the blame really does not fall upon the software, the hardware, the astronauts, Bill Gates, el niņo or any of the other usual suspects.

The problem lies in the question itself: "What is the rate of return on a zero-cash-down investment?" Let's try posing this query a few other ways:

"What's my return on investment when I make no investment?"

"What's my rate of return on nothing down?"

"What's my rate of return on nothing?"  Continue reading  -->


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