EP90: The Importance of Understanding a Cash on Cash Return

In this episode, we discuss the importance of a cash-on-cash return. Breaking down how cash on cash returns work in note investing.

Rick explains how a cash-on-cash return can slightly differ regarding real estate investing and note investing. 

In note investing, cash-on-cash return is calculated as the annual cash flow from the investment divided by the initial cash invested in the note. The resulting percentage represents the return on the cash invested in the investment property or note.

Cash-on-cash return is crucial because it gives you a quick way to determine whether purchasing a note investment is worth it! In other words, in note investing, cash on cash return is often used to evaluate the potential return on a mortgage note investment. 

Learn more by watching this episode of the Paperstac Podcast!

What's Covered: 👇

00:00 Intro
00:47 What Is A Cash On Cash Return?
01:22 How Cash On Cash Works In Note Investing
02:35 What To Consider With A Cash On Cash Return
03:51 Easiest Way To Do A Cash On Cash Return
04:57 What's A Good Cash On Cash Return?
05:29 Calculating Cash On Cash Return 

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