I think everyone here knows how people will often invest in things that they have little to no knowledge about. I have come across real estate investors who can’t even tell me how much cash flow their property makes or are shocked to find out that they have to calculate depreciation!
So I think that by using the ROE calculation above, you can at least have a better idea on how to evaluate properties as to their potential using real numbers and realistic expectations. Collect and analyze the numbers, see how hard the money works for you, and then choose whether or not to invest.
