From the course: Pre-investing: Before Investing in Real Estate

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How to use the measures

How to use the measures - Microsoft Excel Tutorial

From the course: Pre-investing: Before Investing in Real Estate

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How to use the measures

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- Let's play a game. Would you rather know how much money you're going to get from an investment but have no idea when you're going to receive it, or would you rather know when you're going to get it, but have no idea how much you're going to get or how much you have to pay because it's a loss? Not a really fun game, right? And you get the idea, you can't know one without the other and that's the whole idea about these measures of returns. You want to know both. So let's think about the two different parameters that we have been discussing. The magnitude of the investment, as well as the efficiency of an investment. And if we can break down investment opportunities into these four quadrants where we have low efficiency and high efficiency, versus low magnitude and high magnitude. Let's look at the easy ones first, okay. The easy ones are where there are the clear loser and clear winners. If you have both low efficiency and low magnitude, these aren't worth your time to explore any…

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