Acquisition Price

Hi Stessa Community.

I’m fairly new to Stessa and have a question regarding what to enter under Acquisition price.

It seems like there should be a separate cash in option and total purchase cost option. If I enter my cash in amount under acquisition price the return value is inflated. If I enter the total purchase cost then the COC metric is calculated lower.

Any solutions here?

Thank you,

Marcello

@ellochello Good question. Acquisition price should be the final contract price, before closing costs. If you also secured a loan for the property, that should be added separately as a mortgage.

The COC metric will net out acquisition price and original loan balance, and also take closing costs and some capex into account, when calculating the denominator (aka the “cash in” amount).

Closing costs can be added via the Transactions page and categorized as “Capital Expenses > Closing Costs,” if you’re going to capitalize them, or as regular expenses if they can be deducted in full in the year incurred. You may want to connect with a CPA if you’re not familiar with which closing costs fall into each bucket.

For more info on how cash on cash is calculated, see Understanding Your Cash on Cash Return.

To learn more about setting up mortgages, check out Mortgages & Loans: Add & Edit.

Finally, to update your acquisition price, see Basic Property Details: Add & Edit.