Real Estate Math

A Nebraska investor buys a duplex for $298,000 with 20% down. The annual NOI is $22,000. What is the cash-on-cash return on equity invested?

A7.38%✓ Correct
B9.22%
C8.15%
D7.00%

Explanation

Equity (down) = $298,000 × 20% = $59,600. Cash-on-cash = NOI ÷ Equity = $22,000 ÷ $59,600 = 36.

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