Cash-on-Cash Calculator

Cash-on-cash return is your annual pre-tax cash flow divided by the cash you actually invested. Unlike cap rate (which is unlevered), cash-on-cash includes the effect of financing. Formula: CoC = Annual Cash Flow ÷ Total Cash Invested × 100. A $10,000 annual cash flow on $80,000 invested = 12.5% cash-on-cash.

Depends on rate environment and risk. For stabilized small multifamily in 2026, 6-10% is reasonable for Class B in growth markets, 8-15% for value-add in secondary markets, and 12-20%+ in high-yield strategies (BRRRR, distressed). Below 5% means you're betting on appreciation; above 20% almost always signals risk you're under-pricing.

Both. Cap rate is the property's intrinsic yield independent of how you finance — useful for comparing properties. Cash-on-cash is your personal yield given how you actually structured the deal. Two investors looking at the same property at the same cap rate can get wildly different cash-on-cash returns depending on their down payment and loan terms.

No — only cash flow. Principal paydown is wealth building (your equity grows) but it's not cash in your pocket. Some investors use 'total return' to combine cash-on-cash + principal paydown + appreciation + tax benefits, which can run 20-40%+ on leveraged deals. Cash-on-cash is intentionally narrower.

Down payment + closing costs + initial rehab + lender-required reserves + any working capital you funded. Don't count cash you'll need to put in later for major capex (treat those as separate decisions). The clean way: total cash out of your account at closing + 90 days post-close.

Strong underwriting subtracts a capex reserve (typically $200-400/door per year) from cash flow. Without it, you're inflating cash-on-cash by ignoring the inevitable roof/HVAC/water heater replacements. Operators who skip the reserve line have a habit of being 'surprised' by capex spending — it's not surprising, it's underwritten.

Leverage amplifies both directions. At a 7% cap rate property with 5% debt cost, every 10% of additional financing pushes cash-on-cash 1-3 points higher — until the cash flow gets thin enough that one bad month wipes a year of returns. The sweet spot for most small multifamily is 70-75% LTV. Above that and DSCR gets tight; below and you're sacrificing return.

Year-1 often includes lease-up vacancy, deferred maintenance, and one-time costs (PM onboarding, tenant turnover from prior owner). Stabilized year-3+ shows true operations. Run cash-on-cash both ways — year-1 to manage cash, stabilized to evaluate the deal's actual yield.

Standard practice is pre-tax cash-on-cash because tax situations vary by investor. After-tax cash-on-cash factors in depreciation (which reduces taxable income substantially) and can be 30-60% higher than pre-tax due to depreciation shielding cash flow from tax. Most underwriting spreadsheets show both.

When you put in zero cash. A 'true BRRRR' that recaptures 100% of capital at refinance leaves you with infinite cash-on-cash (cash flow ÷ $0). At that point, the metric is meaningless — switch to monthly cash flow per door and equity multiple to evaluate the deal.