Cash-on-cash return

Cash-on-cash return — annual cash flow after debt service, divided by the total cash you actually put in (down payment + friction + renovation). The levered return on your out-of-pocket pesos — useful, and the most gameable metric in the set: higher leverage inflates it while making the deal more fragile. A 12% cash-on-cash at DSCR 1.05 is worse than 8% at 1.5, which is why this course reads it only alongside DSCR and the stress test.

First used in: 3.4 · Underwriting: the Gallinelli math