You might have heard of the term “COC” in real estate. But what does it actually mean, and why is it the #1 way to make consistent cash flow?
COC stands for Cash on Cash.
When buying a real estate deal, this is the what I care about the most.
In my book, How to Create Wealth Investing in Real Estate, I explain why:
“Positive cash flow, not just percentage, but the actual dollar amount of free cash flow after all operations will give you weather economic pullbacks and avoid selling in down markets.”
The #1 calculation investors need to make
When the 2008 housing crisis went down, a lot of people in the game lost all they had — even my bank. Meanwhile, I kept everything I had.
I knew how to calculate cash flow for any situation. And this keeps me winning in the industry to this day.
That’s the power of COC in real estate.
Why COC is so important in real estate
Firstly, positive cash flow means that every single month, your properties are paying you. As an investor, you get consistent passive income in any economy.
Secondly, COC determines the value of multifamily properties. The more cash flow they generate, the higher their value, average rents, occupancy rate, etc. will be.
Thirdly, cash flow protects against the devaluation of cash.
But at the end of the day, Cash on Cash gives investors something priceless — confidence.