Free tool

Cash-on-cash return calculator

Enter an after-repair value, a purchase price, a rehab budget, and the living area. The page returns the refinance loan, cash in, cash back, cash left, monthly rent, annual net, and the cash-on-cash label. The arithmetic is the refinance card from the deal report. It runs in the browser. Nothing you type is uploaded.

The form starts on an invented example where the new loan is larger than purchase plus rehab. That first result is fully returned, so the yield line says Fully returned and does not print a percent. The dollar figures in the written examples below are invented so the rounding can be checked by hand. They are not a closed sale, not a quote, and not a claim about what a refinance usually returns.

The formula, written out

The loan equals the after-repair value times 0.75, rounded to the nearest dollar. Cash in equals the purchase price plus rehab. Closing costs are not included. Cash back equals the loan minus cash in when that difference is positive, and zero otherwise. Cash left equals cash in minus the loan when that difference is positive, and zero otherwise. One of those two leftovers is always zero. This formula cannot show cash back and cash left at the same time.

Monthly rent is an estimate, not a signed lease. It is the average of 1 percent of ARV and $1.25 per square foot. Each of those two pieces is rounded to the nearest dollar, then the average is rounded. Half a dollar rounds up, which is what that rounding does. If square footage is zero, both pieces use 1 percent of ARV, so the rent is that 1 percent figure rather than a blank. Annual net equals monthly rent times 12 times 0.5. Do not round the net before the division.

When cash left is above zero, the percent equals annual net divided by cash left, multiplied by 1000, rounded to the nearest whole number, then divided by 10. That is one decimal place. When cash left is zero and cash back is above zero, the label is Fully returned. There is no yield percent on that result. When cash left is zero and cash back is also zero, the loan matched cash in and there is no percent. The purchase price is a dollar amount you type. In the report that purchase price is often the maximum allowable offer, and you can build that offer on the MAO calculator. Any other purchase price can go through the same refinance lines.

An invented example where the refinance returns cash

This check is invented. After-repair value is $200,000. Purchase price is $94,000. Rehab is $40,000. Living area is 1,500 square feet. Those are the defaults on the form above.

• Cash in is $94,000 + $40,000 = $134,000. Closing costs are not included.
• The loan is 75 percent of $200,000, which is $150,000.
• Cash back is $150,000 − $134,000 = $16,000. Cash left is $0.
• Rent from ARV is 1 percent of $200,000, which is $2,000.
• Rent from size is 1,500 × $1.25 = $1,875.
• Monthly rent is the rounded average of $2,000 and $1,875, which is $1,938.

Cash left is zero and cash back is $16,000, so the result is Fully returned. There is no yield percent. The $16,000 is cash the formula says came back. It is not profit, and it is not a return rate. You still owe the $150,000 loan. The $1,938 rent is the estimate the annual net would have used, and this page does not divide that income by the zero dollars left in the deal.

An invented example where cash is still in the deal

This second check is also invented. After-repair value stays $200,000. Purchase price is $120,000. Rehab is $50,000. Living area is 1,200 square feet. Cash in is $170,000. The loan is still $150,000. Cash back is $0. Cash left is $170,000 − $150,000 = $20,000.

Rent from ARV is still $2,000. Rent from size is 1,200 × $1.25 = $1,500. Monthly rent is the average, $1,750. A year of that rent is $21,000. Half of that year, the annual net, is $10,500. The percent is $10,500 / $20,000, which the one-decimal rounding reports as 52.5 percent. That 52.5 percent is the return on the $20,000 left in, not on the $170,000 spent. The other $150,000 came back as debt. Reading 52.5 percent as the return on the whole project overstates the deal.

Change the rehab and the cash left moves with it. A scope you typed at $40,000 and then raised to $50,000 is $10,000 more cash in, which comes out of cash back or onto the cash left. The purchase price does the same job. A higher purchase raises cash in by that same number of dollars, because closing costs are outside this cash-in figure.

The 50 percent share is not the rental card

The 50 percent expense share is the refinance card. It stands in for taxes, insurance, maintenance, vacancy, and management, and the annual net is half of a year of the rent estimate. The rental card uses 45 percent of gross rent as expenses and divides the remaining income by purchase plus rehab. That denominator is all of the cash you put in, not the cash the refinance failed to return. A cap rate and this cash-on-cash percent answer different questions. The cap rate guide walks the rental card, including the gross rent multiplier.

This page does not price a mortgage payment. There is no interest rate, no monthly debt service, and no refinance closing cost in the formula. A lender who loans a different share of ARV, or who will not lend until a season has passed, is a different loan than the one these lines compute. The BRRRR refinance guide is the writeup of that 75 percent test. This page is the calculator for the same return arithmetic. It does not retell the steps of the strategy.

What these lines leave out

Buyer closing from the flip projection is not inside cash in. If you paid closing costs in cash, the cash-back figure here is high until you add those dollars yourself. The loan is 75 percent of the ARV you typed. If an appraisal comes in lower, the loan shrinks and cash back shrinks with it. The rent is the average described above, not a lease you have in hand. If you already itemized taxes and insurance, do not also keep the full 50 percent expense share or you will count those bills twice.

The page also does not name a target percent. It reports the label the formula produces for the dollars you typed. A fully returned result means the loan covered purchase plus rehab and sent cash back. It does not mean the payment on that loan is covered by the rent. Add a payment outside this page if you need one.

Questions

Where to go next

• Build the purchase price on the MAO calculator before you drop it into the form above.
• Read the BRRRR refinance guide for the 75 percent test and the cash left in the deal.
• Read the cap rate guide before you treat this percent as the rental card.

Open the sample analysis after you sign up. The sample uses invented figures, the same way the $200,000 examples on this page are invented.