Source: https://guthlabs.ai/docs/instruments/real-estate-cap-rate-cash-on-cash-return/implementation/

instrument implementation / implementation-contract

# Real Estate Cap Rate & Cash-on-Cash Return implementation

A source-bound implementation contract for Real Estate Cap Rate & Cash-on-Cash Return; deployment and executable qualification remain separate.

Status: **VERIFIED_CLEAN**Lifecycle: **implementation-contract**

## Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

**Record owner**: Guth Instruments

**Lifecycle**: verified-clean

**Evidence ID**: t5-160

**Effect**: Computation or source lookup only

## Input and validation requirements

Zero purchase price or zero cash invested produces undefined metrics, so the instrument must reject those inputs or show explicit undefined/error results. A separate hazard is sign ambiguity for negative annual cash flow, which can reverse cash-on-cash from -20% to +20% if losses are treated as unsigned magnitudes.

## Required corrections

No binding erratum is attached to this unique-name record. Implementers must still preserve the declared units, domain, and failure behavior.

## Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

````
{
  "inputs": {
    "currency": "USD",
    "purchase_price": 250000,
    "NOI": 18000,
    "cash_invested": 75000,
    "annual_cash_flow": 6000
  },
  "expected_outputs": {
    "cap_rate_percent": 7.2,
    "cash_on_cash_percent": 8
  },
  "working": "cap rate = NOI / purchase price = 18,000 / 250,000 = 0.072; 0.072 × 100 = 7.2%. cash-on-cash = annual cash flow / cash invested = 6,000 / 75,000 = 0.08; 0.08 × 100 = 8%."
}
````

## Other records

[01**Overview**](<https://guthlabs.ai/docs/instruments/real-estate-cap-rate-cash-on-cash-return/>)[02**Mechanism**](<https://guthlabs.ai/docs/instruments/real-estate-cap-rate-cash-on-cash-return/mechanism/>)[04**Qualification**](<https://guthlabs.ai/docs/instruments/real-estate-cap-rate-cash-on-cash-return/qualification/>)

## Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

- `VERIFIED_LEDGER.json`

- `evidence-tranche5/tranche5-results.json`