The document outlines how to calculate the capitalization rate (cap rate) needed to achieve a desired cash on cash return of 20% on an investment property. It provides an example of a $1.5 million property with a 25% down payment of $375,000, financed by a loan of $1,125,000 at 8% interest over 30 years. Based on the numbers provided, the required cap rate to meet the 20% cash on cash return goal is calculated to be 11.95%.
The document outlines how to calculate the capitalization rate (cap rate) needed to achieve a desired cash on cash return of 20% on an investment property. It provides an example of a $1.5 million property with a 25% down payment of $375,000, financed by a loan of $1,125,000 at 8% interest over 30 years. Based on the numbers provided, the required cap rate to meet the 20% cash on cash return goal is calculated to be 11.95%.
The document outlines how to calculate the capitalization rate (cap rate) needed to achieve a desired cash on cash return of 20% on an investment property. It provides an example of a $1.5 million property with a 25% down payment of $375,000, financed by a loan of $1,125,000 at 8% interest over 30 years. Based on the numbers provided, the required cap rate to meet the 20% cash on cash return goal is calculated to be 11.95%.
The document outlines how to calculate the capitalization rate (cap rate) needed to achieve a desired cash on cash return of 20% on an investment property. It provides an example of a $1.5 million property with a 25% down payment of $375,000, financed by a loan of $1,125,000 at 8% interest over 30 years. Based on the numbers provided, the required cap rate to meet the 20% cash on cash return goal is calculated to be 11.95%.