Cash-on-Cash Return

Cash-on-cash return (CoC) is a deal's annual pre-tax cash flow divided by the total equity invested. If you put $1,000,000 of equity into a property and it throws off $70,000 of cash flow after debt service in year one, your cash-on-cash is 7%.

How it's used: CoC is the levered cash yield — what your equity actually earns in spendable cash each year, after the mortgage is paid. It's the counterpart to the cap rate, which is the unlevered yield on the whole purchase price. Underwriters quote a year-one CoC and a stabilized (average) CoC across the hold.

Why it matters: CoC tells you the current income on your money before any sale. A deal can show a strong IRR but a thin year-one CoC if most of the return is back-loaded into the exit — important if you need current income. Unlike the equity multiple and IRR, CoC ignores the sale entirely, so it isolates operating performance.

Formula: Cash-on-cash return = Annual pre-tax cash flow ÷ Total equity invested

Watch the DSCR alongside it — a high CoC built on aggressive leverage can mask thin debt coverage. UpsideIQ reports year-one and stabilized cash-on-cash on every deal; model it on the multifamily pro-forma calculator or see the IRR & equity multiple guide.