b'Step 3: Calculate Your Cash on Cash Return From SaleNext, you need to calculate your distributable cash from the sale.You will need to first model a proposed exit strategy to calculate the projected sale price. To do this, you will use the 5 year pro forma you created above for net operating income at the time of sale. Then you will apply the IRV formula, where R equals the capitalization rate; I equals net operating income, and V equals the estimated sale price. In this case, we are solving for V, so the formula is V= I/R. In plain English, the estimated sale price equals net operating income divided by the capitalization rate.Again, make sure you note the assumptions you made to arrive at these numbers. Because you cant predict the future, a safe assumption is that you will sell the property at the same capitalization rate as when you purchased it or higher.Next, you need to determine the distributable cash generated from the sale. Using the value (V) that you calculated above, you will then deduct:Anticipated costs of sale and outstanding liabilities, The remaining loan balance*;The amount owed to investors for their unreturned capital contributions. The remainder is the distributable cash that can be paid to members from the sale.*Regarding repayment of the original loan, if you have made interest-only payments up to the time of sale; the loan balance due on sale will be 198'