A worked deal
| Price | $1,000,000 |
| Underwritten NOI (7.0% cap) | $70,000 |
| Loan (70% at 7%, 25-year amortization) | $700,000 |
| Annual debt service | $59,369 |
| Pre-tax cash flow | $10,631 |
| Cash in (30% down + 2% closing) | $320,000 |
| Cash-on-cash return | 3.3% |
| DSCR | 1.18x |
The building is a 7.0% cap, but your cash earns 3.3%. To reach 8% cash-on-cash on the same NOI and loan terms, the price has to come down to about $824,000. Try your own deal on the cash-on-cash return calculator.
Positive and negative leverage
The loan constant is the annual payment per dollar borrowed. At 7% over 25 years it is 8.48%. If the cap rate is above the loan constant, debt boosts your cash-on-cash (positive leverage). If the cap is below it, every borrowed dollar costs more than it earns and cash-on-cash falls below the cap rate (negative leverage). With the Georgia 5+ unit median ask at a 5.27% cap n=16, most of today's asks are in negative leverage at full price. See apartment cap rates in Georgia and multifamily financing options for the levers: price, equity, amortization, seller financing.
Cash-on-cash at ask by segment
Medians of active listings with enough rent data to screen, at full ask. A median needs at least 10 listings and a middle-half range needs 12. Rows below that show the count only.
| Segment | Listings (n) | Median CoC | Middle half | Cash flow positive | 8% or better |
|---|---|---|---|---|---|
| Georgia apartment buildings (5+ units) | 16 | -2.2% | -5.7% to 2.2% | 44% | 19% |
| Georgia 2 to 4 units | 129 | -2.3% | -4.9% to 2.6% | 38% | 12% |
| Georgia, all 2+ units | 145 | -2.3% | -5.4% to 2.6% | 39% | 13% |
| Core Metro Atlanta (13 counties) | 105 | -2.7% | -5.5% to 1.6% | 34% | 10% |
| Georgia outside Core Metro | 40 | -0.4% | -4.7% to 5.9% | 50% | 22% |
| City of Atlanta, all 2+ units | 50 | -2.9% | -5.9% to 2.3% | 38% | 14% |
| City of Atlanta, 2 to 4 units | 45 | -2.4% | -4.9% to 2.6% | 40% | 13% |
| City of Atlanta, 5+ units | 5 | Not enough listings for a median | |||
| Core Metro Atlanta, 5+ units | 8 | Not enough listings for a median | |||
| Outside Core Metro, 5+ units | 8 | Not enough listings for a median | |||
By county
| County | Listings (n) | Median CoC | Cash flow positive |
|---|---|---|---|
| Fulton County | 48 | -0.4% | 50% |
| DeKalb County | 19 | -3.8% | 16% |
| Gwinnett County | 11 | -4.7% | 18% |
| Cobb County | 10 | -3.0% | 10% |
What moves cash-on-cash
- Price. The biggest lever. A few points off the ask changes cash flow and cash in at the same time.
- Rate and amortization. A longer amortization lowers the loan constant even at the same rate.
- Equity. More down raises cash flow but also cash in. Under negative leverage it lifts cash-on-cash; under positive leverage it lowers it.
- Real NOI. Property tax at your price, insurance and owner-paid utilities. See NOI for apartment buildings.
- Seller financing. A lower rate or interest-only period on part of the price can flip a deal to positive.
Lenders look at the same cash flow through DSCR. A building that is cash-flow negative at the ask almost never clears a 1.25x DSCR test either.
Run it on a real building: apartment buildings for sale in Atlanta and apartment buildings for sale in Georgia are a good place to start, and multifamily investment properties in Georgia covers duplexes to 50+ units. Leased commercial properties for sale in Georgia and churches for sale in Georgia with a tenant in place run through the same cash flow after debt. Vacant land for sale in Georgia has no cash flow until it is built and leased, and asking rents on commercial space for lease in Georgia help you test the rent line. Send me the one you like and I will rerun it on your loan terms.
How to calculate cash-on-cash, step by step
- Underwrite NOI. Start from the rent roll and T-12, then add vacancy, management, reserves, insurance and property tax at your price.
- Compute annual debt service. Twelve monthly principal and interest payments at the quoted rate and amortization.
- Get pre-tax cash flow. Cash flow = NOI minus annual debt service. Take out any required replacement reserves if NOI did not already.
- Total your cash in. Down payment plus closing costs, lender fees and any repairs you fund at closing.
- Divide. Cash-on-cash = annual pre-tax cash flow / total cash invested. Re-run at your offer price and at a rate one point higher.
How these numbers are built
Source: active FMLS Residential Income listings in Georgia on the jeffcrowecre.com feed, snapshot dated 2026-10-26. Each listing is re-run at full asking price with its reported rents, a standardized expense load and the loan terms in the note above. Cash in is the down payment only, so real returns after closing costs run a little lower. 145 of 263 active listings had usable rent data. Spot-checked before publish: cash-on-cash re-derived as cash flow divided by the down payment on every included listing (0 mismatches). Aggregates only. Listing data is from the listing brokers via FMLS and is not verified.