Feb 11 • General discussion
📊 Underwriting Tip: Cash-on-Cash Isn’t One Number, It’s Two
Too many investors calculate cash-on-cash (CoC) once and call it a day. That’s how deals get misunderstood.
You should always run both:
🔹 Current Cash-on-Cash
This shows what the property is doing right now.
Formula:
Annual Cash Flow ÷ Total Cash Invested
Use:
• Current rents
• Current expenses
• Current debt terms
This answers: “What am I getting paid today?”
🔹 Pro Forma Cash-on-Cash
This shows what the property can do after execution.
Use:
• Market rents (not wishful rents)
• Stabilized expenses
• Renovation + refi assumptions
This answers: “What does this become if the plan works?”
⚠️ Pro Tip:
If the current CoC is negative or razor thin, your pro forma better be realistic — not optimistic. Cash-on-cash exposes weak assumptions fast.
💡 Smart investors buy on current performance and improve toward the pro forma, not the other way around.
👉 Want to get sharper at this?
Join the ProSphere Skool community where we break these numbers down step-by-step with real deals, not theory.
☕📈 Learn it. Underwrite it. Execute it.
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📊 Underwriting Tip: Cash-on-Cash Isn’t One Number, It’s Two
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