Hi,
When determining your ROI on a property flip which of the two below would you consider a better way of calculating? Pre-Tax Calculations.

1) Net Profit/ Purchase Costs and Rehab Costs and Down Payment and Mortgage and Operational Costs and Selling Costs less income generated from the property.

OR

2) Net Profit/ Purchase Costs and Rehab Costs and Down Payment.


So far I have come across both thoughts below:
--Some think
Net Profit / over Initial Cash Invested.
Initial Cash Invested =Purchase, Rehab and Down Payment.

--While others think
Net Profit/ over Initial Cash Invested plus Operational, Selling, and Mortgage costs Less any income generated from the property.