How to classify a HELOC when calculating Cash on Cash Return

[Brian Goad]

I am a novice real estate investor and have run into a question which I haven't been able to find an answer for on the forums. (Sorry if this has already been covered). I have a HELOC in place to cover a down payment on a potential rental property. I am running numbers on a single family home and the purchase price is unknown at this time. I will assume 150k for now. I plan to put 20% down ($30,000) and pay that out of a HELOC that I secured on a previous home that I lived in long term (now a rental property). When running numbers, do you count the 20% down as part of the calculations for cash on cash return even if the HELOC cash is coming from a rental property? Or, if the HELOC cash is coming from a rental property and not your primary home, is it not counted at all in the cash on cash calculation? Apologies in advance, for some reason this is all too confusing for me!