Real Estate Math

A Nevada investor wants a 10% annual cash-on-cash return on a $75,000 down payment. What must the annual after-debt cash flow be?

A$6,500
B$7,000
C$7,500✓ Correct
D$8,000

Explanation

Cash-on-cash return = Annual Cash Flow / Down Payment. 10% = Cash Flow / $75,000.

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