Real Estate Math
An Alaska investor buys a property for $750,000 with a 30% down payment. The property generates NOI of $60,000/year. The cash-on-cash return (ignoring debt service) before financing is:
A6.0%
B8.0%
C11.4%
D26.7%✓ Correct
Explanation
Cash invested (down payment) = $750,000 × 30% = $225,000. Cash-on-cash before financing = $60,000 ÷ $225,000 = 26.
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