1031 Exchange What is Your Down Payment After Profit Called

[Kim Hopkins]

This is a confusing question. Let's say I put down $100,000 into a property which I then sell a few years later for $150,000. Now let's say I 1031 that into a new property with a total down payment of $225,000. If I'm calculating my cash on cash, the technical definition would be the cash flow divided by the $225,000. 

However, I also think it's worth calculating my cash on cash based on the total cash I actually put down (took out of my pocket). Call that "Adjusted Down".  In this case, that would be the original $100,000 plus the additional $75,000 (=$225k-$150k) I needed for the new deal for a total of $175,000 in Adjusted Down. 

It make more sense to me to calculated the cash on cash using this Adjusted Down of $175,000 in the denominator (vs the $225,000) since the $50,000 I threw into the new deal as profit from the old one gives me an infinite return. 

Does this make sense to anyone else? Does this "Adjusted Down" number have a name? 

Thanks and sorry if I caused you brain pain.

Kim