Calculate the Cash-on-Cash Return (Show your work):

Los Angeles: $2,000,000 Property, 14 bed, 10 Bath

Assume you have 25% down payment ($500k), and you are going to borrow 75% ($1,500,000) at a loan term of 30 years fixed rate mortgage of 3.5%.

Assume you have a $15,000 loan cost as part of your initial investment.

Assume vacancy rate of 3%, management fee of 6%, property insurance of $2400 per year, property tax at 1.25%, repair and maintenance expenses at 2% of gross rental income.

Assume 3 bedrooms and 2 baths will generate an income of $2800 per month.

Assume 4 bedrooms and 3 baths will generate an income of $3200 per month.

Assume tenants pay for all utilities and trash.