In the example you provide, the ‘Yield-on-Cost’ will be the net operating income at stabilization (i.e. at the end of the two-year renovation project) divided by the total project cost to get to stabilization (i.e. acquisition price + renovation costs).
If you’re an Accelerator member, I’d recommend you also review the various Accelerator forum discussions on Yield-on-Cost. Those discussions between Spencer/Michael and Accelerator members on the topic of Yield-on-Cost should augment my definition above. You’re also welcome to ask the guys, via the Accelerator forum, follow-up questions on the subject as you need.
You can find those discussions here: