CoC Calculation with LOC money

[Bennett Albertson]

If I were to use a security backed LOC to purchase a $75K property. Let's say I can get the LOC at 5% interest rate. Include $5K for closing costs and minor repairs. Annual cash flow is $2,940. What would the CoC return be?

Is this the correct calculation?

$2,940/($0 down + $5K costs) = 59% CoC ROI

How am I supposed to correctly evaluate this financing option?

Thanks!