Cash-on-Cash Return Calculator
Measure a flip or rental deal the way investors compare them: gross profit margin, cash-on-cash return, and the annualized rate that puts a fast flip and a slow hold on the same footing.
Of total project cost.
Of ARV.
Projected profit
$242,000
After $108,000 sales costs, on $170,000 cash invested.
- Gross profit marginProfit ÷ ARV
- 20.2%
- Cash-on-cash returnProfit ÷ cash invested
- 142.4%
- Adjusted cash-on-cashProfit ÷ total project cost
- 28.5%
- Annualized cash-on-cashCash-on-cash scaled to a full year
- 189.8%
Returns are only as good as the inputs. An optimistic ARV or an unverified rehab budget will produce an impressive percentage that never materializes. Use the same assumptions across every deal you compare, or the ranking is meaningless.
Reading the return figures
Profit alone doesn’t tell you whether a deal is good — you have to weigh it against the cash and the time it ties up. Gross profit margin (profit ÷ ARV) tells you how much cushion the deal has, and so how wrong your numbers can be before it stops working. Cash-on-cash (profit ÷ cash invested) is the return on the money you actually put in, which is the figure that decides where your next dollar should go.
Those two can disagree sharply, and the disagreement is informative. Heavy leverage shrinks the cash you invest without changing the profit, so it flatters cash-on-cash while leaving the margin — your actual room for error — untouched. Adjusted cash-on-cash divides by total project cost instead, stripping the financing back out, so comparing it against the plain figure shows how much of the return is the deal and how much is the debt.
Finally, because a fast flip and a slow hold aren’t comparable at face value, the annualized cash-on-cash rate scales the return to a full year. A 30% return in nine months is a materially better use of capital than the same 30% over two years, and only the annualized figure says so.
Frequently asked questions
Educational tool only. Return figures depend entirely on assumptions you supply — verify ARV, rehab budget, and timeline with your own contractors, lenders, and agents. Not investment, tax, or legal advice.
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