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30 Days of 3.0 – Day 16: Cumulative Cash Invested

Welcome to Day 16 in our “30 Days of 3.0” series. It’s the first day of the second half of this series, and we still have a lot of neat stuff to cover. Yesterday we talked about how to use Cap Rates to calculate the future value of an income-producing property. Today, we’re going to talk about how much capital has been put into the property.

The next field we’ve added to the new Returns section of the Cash Flow Forecast is “Cumulative Cash Invested”. The idea here is to see how much capital it took to acquire the building, and how much is needed to re-invest in the property in order to maintain it.

The formula looks like this:

Cumulative Cash Invested = Initial Loan Costs + Principal Paid to Date + Capital Expenses to Date

Now, we can’t really use the result for this in any of the other math involved, otherwise it could potentially double-count the Capital Expenses (a mistake we made during our first pass at the formula). But it’s very useful information, nonetheless.

Tomorrow, we’ll show you another indicator regarding the state of your debt obligations. I’ll see you then, and as always, I hope you have a fantastic day! :)