The primary objective of investing in real estate is for cash flow and appreciation, but just because an investment property has a positive cash flow and appreciates does not make it a “buy.” A property must produce enough cash flow and equity to provide an acceptable return for the amount of cash invested [1] . In other words, the return on investment needs to be adequate enough to make the investment successful. So, if cash flow and equity are major components of the investment strategy, how does one properly measure them against the needed investment capital?