CAN ANYONE TELL ME, IF YOUR USING YOUR EQUITY IN YOUR EXISTING PROPERTIES TO PURCHASE ANOTHER INVESTMENT PROPERTY AND YOU ARE BORROWING 100% OF COSTS PLUS OUTLAYS, HOW DO YOU WORK OUT THE CASH ON CASH RETURN? (ie no deposit is put down)
GEOFF
G CREE
Hi Geoff
if you aren’t putting any of your own money into the deal but are financed 100% then you can’t work out a cash on cash return.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
To make the COC return meaningful, I would assume you are paying a 20% deposit.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Geoff
Cash on cash return is a not necessarily a good tool to use. If an investment costs you $1 of your own money and you make $10 at the end of the year after all expenses then you COCR is 1000% At the end of the day you have only made $10.I prefer to count the dollars rather than calculate the percentages.
Cheers
JeffHi Geoff
i agree with jeff and terry’s comments, but i see the Cash on cash return as my most valuable tool when i’m assessing a deal. But i need to ensure the % of my cash into them must be the same if i’m to compare deals. I always use a 20% deposit in the deal to see how it turns out.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
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