Real Estate Math
An investor purchases a duplex for $420,000. Each unit rents for $1,600/month. Annual operating expenses are $14,400. What is the annual cash-on-cash return if the investor put 30% down and the annual debt service is $20,640?
A8.1%✓ Correct
B9.5%
C7.2%
D10.0%
Explanation
Down payment = $420,000 × 30% = $126,000. Gross annual rents = 2 × $1,600 × 12 = $38,400.
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