The Core Formulas Every Investor Must Know

Real estate rewards people who can do simple math quickly and honestly, and it punishes people who fall in love with a property before running the numbers. The good news is that none of the math is advanced — almost every investing decision comes down to a handful of formulas built from addition, subtraction, multiplication, and division. The catch is that each formula has a precise definition, and most beginner mistakes come from blurring those definitions: counting rent that will never be collected, forgetting expenses that are certain to arrive, or treating a mortgage payment as if it were an operating expense. To keep everything concrete, this module follows one fictional running example from start to finish — the Maple Street duplex, a two-unit building priced at $250,000 where each unit rents for $1,300 a month. It's an illustrative property rather than a real listing, and every number attached to it was computed and double-checked so the examples add up exactly. Watching the same property flow through every formula shows how the numbers connect, instead of memorizing each one in isolation. By the end of the module, the Maple Street duplex will have been measured every way professional investors measure a deal — and the results say a lot about how today's interest rates change the game.