An example of investment: Dutcher

Dutcher was a first for me for 2 reasons:
- the first single family dwelling I bought
- the first time I was investing with a private lender

It is a small 3 bedroom house, 5-minute walk to downtown
Never have problems renting it, tenant pays for all utilities: electricity, oil heating and water sewer

Income =
Rent $700/mth

Expenses =
Mortgage $250/mth
Insurance $40/mth
Property taxes $100/mth

Monthly cash flow = $310

Feb 2014 -
purchased for $40,000
I put $4,000 down

March 2016 -
appraised for $55,000

Increase in value over 2 years = 37.5%

Cash on cash return over 2 years =
- value increase: $15,000
- cash flow: $5,668
$310 X 12 months X 2 years minus 4% vacancy rate $672 minus 1% of value in repairs each year $1,100
- Mortgage pay down $1,835
Total: $22,563

So cash on cash return is 564%