Calculate the free-and-clear cash flow & Return on assets (ROA)


Cost of Asset ($):

Gross Revenues ($):

Vacancies ($):

Operating Expenses ($):

Property taxes ($):

Debt Service ($):


Free-and-clear cash flow helps the lender (banks) determine if there will be sufficient money to service the debt on the property in case of a foreclosure.


Calculating free-and-clear cash flow

Net Revenue (per year)
= Gross Revenues - Vacancies

Expenses (per year)
= Operating Expenses + Property Taxes

Free-and-clear cash flow (amount left over to service debt)
= Net Revenue - Expenses

Net cash flow
= Free-and-clear cash flow - Debt Service

Return on assets (ROA)
= Free-and-clear cash flow / Cost of Asset

*Debt Service (per year):
Example. a 5% interest, 25 year, $1 million mortgage equals a monthly payment of $5,845.90 and x 12 months is $70,150.80