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Real Estate Glossary

Cash-on-Cash Return (CoC Return)

Quick Answer

Cash on cash return is annual pre-tax cash flow divided by the cash you put in. It answers: for every dollar of my money stuck in this deal, how much cash came back this year? It is a hold metric. It does not replace MAO or ARV when you are screening a wholesale buy.

What is Cash-on-Cash Return?

Formula: Cash on cash = (Annual cash flow ÷ Cash invested) × 100 Annual cash flow = rent collected − operating expenses − debt service (if any). Cash invested = down payment + closing costs + rehab you funded + reserves you actually put in. What cash on cash does not do: - Fix an ask that sits over buyer MAO - Prove the property will rent at your assumed number - Replace a full hold sheet (taxes, insurance, vacancy, repairs)

CoC Return Formula

Cash on cash = (Annual cash flow ÷ Cash invested) × 100

Frequently Asked Questions

What is a good cash on cash return?+

It depends on market, risk, and how much borrowed money sits on the deal. Many hold buyers talk in the high single digits to teens. Compare against your other options and your real cash in, not a blog target.

Is cash on cash the same as ROI?+

No. Cash on cash is annual cash flow over cash invested. ROI can include equity build, appreciation, and sale proceeds. Say which one you mean.

Do wholesalers need cash on cash?+

For flip buyers, usually no. For landlord buyers, yes after the contract clears MAO. Lead with price math first.

Can DealBeast calculate cash on cash for me?+

Paste an address for ARV, MAO, and ask vs MAO on one screen. Build cash on cash on your hold sheet or with the rental property calculator using your rent and expense assumptions.

Related Terms

Cash Flow Cap Rate Noi