How to Calculate Cash on Cash for HELOC?
Hello,
There's a duplex that's going for $250k, with gross cash flow at $1900. Vacancy at 7% ($133), Insurance $70, Maintenance / CapX at 7% ($133), Taxes $75.
I've got a HELOC that lets me borrow up to $63,000 at a Variable interest rate of Prime - 0.25%. Today that means it's 4.75%.
If I use the full HELOC for the down payment, that's $250 / month in payments, and that'll give me $188 in net cash flow after all expenses.
I've also got maybe $30k I can put down, which will increase my cash flow by about $125/ month.
So, my question is- would yall make the down payment pure HELOC? Or put down more of my own money for more cash flow?
How do you calculate cash on cash when you're using a HELOC for a down payment?