Cash Flow vs. Cash-on-Cash Return: DON'T Make This Mistake

Episode #308

How important is cash flow when analyzing real estate deals? Many rookies zero in on this familiar figure when crunching the numbers, but there’s another metric that is FAR more important: cash-on-cash return. This simple but powerful equation can help you determine whether an investment property is worth buying!

Welcome to another Rookie Reply! Many rookies struggle to analyze deals when starting out. Fortunately, Ashley and Tony are here to show you exactly how to calculate your cash-on-cash return on a property. They discuss when to use lines of credit to help fund deals, as well as how to pitch seller financing options that make sense for both sides. They also talk about the home appraisal process and, finally, whether an offer on a property can ever be TOO low!

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group, call us at the Rookie Request Line (1-888-5-ROOKIE), or click here: https://www.biggerpockets.com/reply?utm_source=youtube&utm_medium=description&utm_campaign=none

~~~~
Join BiggerPockets for FREE:
https://www.biggerpockets.com/signup?utm_source=owned_media
~~~~
Join the Real Estate Rookie Facebook Group:
https://www.facebook.com/groups/realestaterookie
~~~~
Find an Investor-Friendly Agent in Your Area:
http://biggerpockets.com/agentmatch
~~~~
Find Investor-Friendly Lenders:
http://biggerpockets.com/lendermatch
~~~~
Submit Your Real Estate Rookie Question!
https://www.biggerpockets.com/reply?utm_source=youtube&utm_medium=description&utm_campaign=none
~~~~
Use the BiggerPockets Investment Calculators to Analyze Your Deals:
https://www.biggerpockets.com/investment-calculators?utm_source=youtube&utm_medium=description&utm_campaign=none
~~~~
Using Lines of Credit to Kickstart Your Investing Career:
https://www.biggerpockets.com/blog/rookie-podcast-20-charlie-ashley?utm_source=youtube&utm_medium=description&utm_campaign=none
~~~~
Connect with Ashley and Tony on BiggerPockets:
Ashley: https://www.biggerpockets.com/users/echopm?utm_source=youtube&utm_medium=description&utm_campaign=none
Tony: https://www.biggerpockets.com/users/tonyr75?utm_source=youtube&utm_medium=description&utm_campaign=none
~~~~
Shoot Ashley and Tony a Question on Instagram!
@wealthfromrentals or https://www.instagram.com/wealthfromrentals/
@tonyjrobinson or https://www.instagram.com/tonyjrobinson/


00:00 Intro

03:44 How Low Is TOO Low?

12:28 Cash Flow Vs. Cash-on-Cash Return

16:45 Using a Line of Credit

27:57 Appraisals 101

36:42 How to Pitch Seller Financing

42:42 Send Us Your Question!