Help figuring CoC during a Cash-out Finance

[Christian Sommer]

[Calc Review] (I missed that in my title field and can't figure out how to edit the title)

With 2 separate free and clear properties, both with equal appraised values, I'm try to calculate a simple Cash on Cash (CoC) model in order to determine which one to perform a Cash-out finance with. In the process I have encountered a weird stumbling block where one of the original property values is less than the Cash-Out amount and was hoping someone could weigh in.

House A:
105,000 House Purchase (original investment cash)
<100,000> Cash-out finance cash less fees
5,000 = new investment cash

House B:
80,000 House Purchase (original investment cash)
<100,000> Cash-out Finance cash less fees
<20,000> = new Investment Cash (negative value)

Cash on Cash for above examples
This is where the above examples do not make sense to me. Example B, which pays back the original investment cash (80K), + 20K more, ends up at a lower CoC than A. It feels like the CoC should be over 100% for B.

The following CoC equations assume bothproperties have the same annual net income post Cash-Out option of $3,000. 

CoC = Annual net income / New Investment Cash

A
60% = (3,000/5,000)

B
-15% = (3,000/-20,000)

In sum, any advice would be greatly appreciated as I'm trying to better understand my leverage opportunities and the CoC related to them.

Christian