Check my math please? calculate cash on cash for a cash purchase

[Jim P.]

Hi All,

I've searched and cannot find much that pertains to this issue.

I just bought a very small house(cottage) for $25K in cash. I may try to refi/heloc/etc...etc...etc... in the future to get my money back out to re-invest.

I'm thinking that the cash on cash for something like this is:

normal cash-on-cash formula as it works with the numbers of the refinance

Then subtracting:

whatever return you would have on that cash(put in whichever investment you choose)--- for the amount of time the deal is using "cash"- and not bringing income to you.

Hard to explain- but does this seem correct? I'm not really worried about my return so far--- just interested in learning the math...

thanks,

Jimmy