Analyzing Return With No Cash In Deal

[Rashad Luckett]

I am curious as to how investors are evaluating their returns if they have no cash in a deal.

Example:

3bd/2bath

Purchase: $85k

ARV: $155k

Reno: $15k

The down payment/closing costs and reno cost me a total of $30k out of pocket. I was able to get a HELOC for $35k which allowed me to get all of my cash out. (Yes, this was a HELOC on an investment property. PENFED does them until you own more than 4 properties. )

My cash flow after all expenses (piti, capex, vacancy, etc…) is $400/mth. Evaluating a COC return seems impossible to me since I have none of my own cash in the deal. Am I thinking about this all wrong? How should I be evaluating my return in this situation?