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HappyNest Real Estate Finance 101
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Cash-on-Cash Returns
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Step 1: Determine the annual pre-tax cash flow
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Pre-Tax Cash Flow = NOI - Annual Loan Payment
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Net Operating Income (NOI)
 $ 700
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Investment Assumptions:
Less: Annual Loan Payment
 $ 420
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Rental Income
 $ 1,000
Annual Pre-Tax Cash Flow
 $ 280
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Less: Operating Expenses
 $ 300
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Net Operating Income
 $ 700
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Step 2: Determine Initial Cash Investment
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Purchase Assumptions:
Purchase Price
 $ 10,000
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Purchase Price
 $ 10,000
Less: Loan Amount
 $ 7,000
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Initial Cash Investment (Equity)
 $ 3,000
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Financing Assumptions:
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Loan-to-Value
70%
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Loan Amount $ 7,000
Step 3: Calculate Cash-on-Cash Return
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Interest Rate6.00%
Cash-on-Cash = Cash Flow/Initial Cash Investment
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Loan Payment (Interest Only)
 $ 420
Cash-on-Cash
9.33%
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Disclaimer: This spreadsheet is provided for informational purposes only and is not intended to be used as financial advice. The calculations and figures included in this spreadsheet are based on assumptions and estimates and may not reflect the actual financial situation. The author of this spreadsheet assumes no responsibility for any errors or omissions and disclaims any liability for any loss or damages resulting from the use of this spreadsheet.
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Copyright Notice: Copyright 2023 HappyNest Holdings LLC. All rights reserved. This spreadsheet and its contents are protected by copyright laws and international treaties. Unauthorized reproduction or distribution of this spreadsheet, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law.
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