480% cash on cash return in 9 months?

[Paige de W.]

Investment Info:

Other other investment.

Purchase price: $15,000
Cash invested: $2,500
Sale price: $27,000

I bought a tax foreclosed lot in my neighborhood and ended up selling it about 9 months later for a 480% cash on cash return? Am I doing the math wrong?

What made you interested in investing in this type of deal?

I just wanted to get started, and walked by this lot one evening. It was not on the MLS but for sale via contract for deed thru the county.

How did you add value to the deal?

I did nothing to add value. I think it was beginners luck.

What was the outcome?

Over 10k in my pocket for doing almost nothing.

[Paige de W.]

@Moises R Cosme I'm hoping to start wholesaling 1-2 deals a month to gain some capital and then use the BRRR strategy going forward!

[Moises R Cosme]

FANTASTIC!!!  what are you going to do next?

[Paige de W.]

@Moises R Cosme I'm hoping to start wholesaling 1-2 deals a month to gain some capital and then use the BRRR strategy going forward!

[Justin V.]

@Paige de Wees

I’ve normally seen cash on cash returns used for rental cashflow. Shows how much money one makes back each year for their initial investment. Since you aren’t holding, I’m not sure you call it cash on cash since it’s a 1 time deal.

Not knowledgeable in wholesaling, but are you calculating 27000-15000= 18000 and 18000/2500=4.8? Correct?

I’d say you got a 480% return on investment in 9 months. Not sure on a better way to state it. Guys ge

[Account Closed]

Congratulations Paige on a great deal!! Excited for you. Great returns. I'd agree with Justin V though, generally Cash on Cash return is used with Buy and Hold investments as a metric to see when you'd get your initial investment back. A cash on cash return (CoC ROI) of 20% yearly would suggest after 5 years all your initial money invested would be returned back to you.

[Moises R Cosme]

@Paige de Wees  good plan!! 

[Paige de W.]

@justinvoegele @justinschreibeis Thanks - I am definitely still learning the lingo :) 

[Michael Barnhart]

@Paige de W. great work! Are you going to continue to try to find deals like this?

[Paige de W.]

@Michael Barnhart Definitely!

[Darius Ogloza]

To calculate the return on your invested cash you would normally subtract sales costs.  Any way you slice it, a very nice return.  Congrats!