Hello, this is Shuo.
So we commonly use “cash on cash” when analyzing a deal for expected returns. It is the rate of return expressed as a percentage based on cash flow and equity investment.
CoC (cash on cash) return is calculated by dividing the cash flow by the initial investment. For example, with a cash flow of $300,000 and an initial investment of $3 million it will result in cash on cash return of 10%.
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Patrick Grimes is a design engineer and CEO and Founder of Invest on Main Street, LLC. His real estate holdings include general partner ownership of a multifamily and single-family real estate portfolio valued over $146M, including 1,950+ units across the southeastern United States and Texas.
He has been active in real estate investment since 2007, including purchasing land and distressed assets, renovating them, and stabilizing them for long-term cash flow. To scale his real estate portfolio, Patrick moved from single-family to multifamily investing and founded Invest on Main Street, a private equity firm specializing in multifamily value-add projects in emerging markets.