How would you calculate...

[Graham Mink]

Hello!

I am curious to see how others out there would calculate a deal when 100% of it is financed?

I have several investment properties with HELOC's on them and available equity. If I buy a $200k investment property and use $55k from my HELOC to cover the down payment and closing costs, how would I calculate Cash on Cash Return? If I am putting $0 of my own cash into it my return is infinite, by dividing by $0, but obviously I am limited to what I can purchase by the size of my HELOCs. If the property cash flows $10k per year after all expenses(including repaying the HELOC over 10yrs) is my cash on cash 0% or (10k/55k=) 18%?

Just curious to see how others would handle these calculations. It can get pretty confusing when you are trying to analyze multiple properties to try and choose which is best.

Thanks for your time!

Graham