will rcv. tremndous 20.5% cash on cash return w/ a pro forma cash on cash return of 29.4% what does this mean?

In Buying Property - Asked by Thomas L. - Apr 4, 2015
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Juve P.
Orange, CA

Without reading more into it. For every 100 you invest in cash, you will receive 20.50. BUT if the investment "performs" base on a value that the broker is telling you that you could add, it may give you 29.40 for every 100.

May 28, 2015
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James G.
Tampa, FL

Cash on Cash refers to your net return after all expenses and after paying all debt service. You can calculate it by taking your net income after debt service and dividing it by the down payment or amount of cash you have into the deal. That will yield your cash on cash return percentage. Pro forma refers to anticipated return in the future after certain assumed variables take place such as rental increases, increased occupancy, etc.

Jun 5, 2015
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