Deal Analysis - Need input / help

[Jay Dean]

I am working on a spreadsheet for deal analysis and I need some input.

In my deal (year 1) I have $10,512.00 in income and $8,316.96 in operating expenses.  Thus, income less operating expense is $1,195.04. 

What is the term or name for "income less operating expense" and what is my target / goal?

For my loan, I have $674.98 in principal and $2,195.04 in interest in the first year.  Thus, I have $2,947.15 in loan expense in the first year.  Thus, my income less operating expense less mortgage expense is a loss of $752.11.

What is the term or name for "income less operating expense less mortgage expense" and what is my target / goal?

Finally, if I sell after year 1 it looks like this:

Sale price - $75,000.00

Loan balance due - $45,075.02

Equity - $29,924.98

Closing Costs - $5,625.00

Total Profit from Sale - $24,299.98

Income less all expenses - $752.11 (loss)

Total Cash Return - $23,547.87

Total Initial Cash Investment - $16,000.00

Have I used the correct terminology here and am I correct in saying that my cash on cash return is 147.17%

I can also send my spreadsheet if someone wants to PM their email address.

Thank you.

[Kevin Wang]

Hi Jay Dean

That is called net operating income.

If you want to know the total cash on cash return Formula is (total net income earned during rental period+net sale price)/cash invested