What you need to know about CASH-ON-CASH-RETURN

Today’s real estate investing word is cash on cash or cash on cash return.

To make it easy, think of it this way…when you sell a property, how much money did you actually put in it versus?

The simplest form of formula for cash on cash: cash flow/total cash invested OR profit/total cash invested.

It is not a matter of how much you finance, you figure this amount based on the money coming out of your own pocket.

You look at the return you made on a flip or the net operating income of a rental and divide that by your cash you invested to get cash on cash return. 

You hear a lot of investors talk about things like this. So make sure you understand it. You might want to look up online to find out the exact formula on how to calculate it  specifically to your real estate investments.

Make sure you go to DFWTOP.com/words if you want to download 22 Real Estate Investing Terms you need to know. It’ll help you as a new real estate investor sound like a pro.