Understanding Cash-On-Cash Return On Investment (ROI)

GRANT DIGGLES

President
North Peak Investments

So you want to be a real estate investor? We love that! North Peak wants every investor to be as successful as possible when it comes to creating personal and financial freedom through real estate. If you’re just getting started, then this article is for you as there some basics you going to want to know before spending a single dime.

One of the most basic concepts you’re going to want to have under your belt is understanding what Cash-on-Cash Return On Investment is and how to calculate those numbers. This simple equation will play a part in every investment assessment you’ll be making and is the standard for all non-commercial investments which include single-family homes and multifamily properties, representing usually 4 or fewer units.

We’ve included a whiteboard episode from our video library to walk you through the process from beginning to end. We’ve also included a real-world pro forma to further illustrate the details that are outlined in the video.

Photographs are from North Peak’s April visit to the Chicago market. Turnkey and multifamily at its best.

As always, please don’t hesitate to schedule a meeting with us if you have any further questions regarding this article or the services we provide. We’re here to help you succeed!

Happy Investing,

Grant Diggles

President, North Peak Investments

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