Calculating Total Cash Investment for CoCROI after a Refinance

[Patrick Chafe]

Hi All,

I am new to real estate investing and have a question on calculating total cash investment after a cash out refinance. I bought a house(as a primary residence) a few years ago and renovated it and eventually did a cash out refinance to pay off my school loans and then had some left over. My initial cash investment was about $27,500, and my cash out refinance was about $15,000 more than that. Now i am ready for my next property but want to keep this one as a rental, however i am having trouble determining total cash investment(to then calculate cash on cash return on investment), if technically ive been paid back that initial investment (and even had more than total cash investment).

Do i still have to include the initial $27,500 total cash investment or is it $0 sense i’ve technically been paid back? And if it is $0 how do i calculate CoCROI to determine if it is worth keeping as a rental, because Total Annual Cash Flow / Total Cash Investment wont work.

Thanks for the help!

-Pat