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Hi - a cash on cash return calculation question.

  1. profile image45
    dvcasmeyposted 8 years ago

    Hi - a cash on cash return calculation question.

    I have an agent presenting multi-family property and is attempting to factor in the principle reduction to the cash on cash return calculation. In other words, pre-tax cash flow plus principle reduction divided by investment. Is that common?

  2. blake4d profile image59
    blake4dposted 8 years ago

    I have heard of that, but other than that fact I cannot give you much more info.

  3. dabeaner profile image57
    dabeanerposted 8 years ago

    A fried of mine has a program for evaluating such properties.
    Look for "Property Profile" at:

  4. jamesrk profile image32
    jamesrkposted 8 years ago

    No. Cash on cash is typically just the first year's cash flow divided by the initial cash investment. What your colleague is doing is probably best in a return on equity computation. You might advise him to look at my software at http://www.proapod.com The software will make all these computations automatically.