Free Tool

Equity Multiple Calculator

Total dollars back per dollar in. Combine annual cash flows + refi proceeds + sale to compute equity multiple, IRR, and where the deal lands by hold period.

Investment
$
Distributions per year
Year 1
$
Year 2
$
Year 3
$
Year 4
$
Year 5
$
Refinance Proceeds (optional)

0 = no refi

$
Sale
$

After loan payoff + closing costs

Or load an example
Equity Multiple
2.00x
$200,000 returned on $100,000 invested.
IRR
16.4%
Annualized over 5 yrs
Total Profit
$100,000
20.0% avg/yr (simple)
Verdict
Solid for a 5-yr hold
Breakdown
Operating distributions$40,000
Refinance proceeds$0
Net sale proceeds$160,000
Total returned$200,000
Equity multiple is pre-tax. Recapture, capital gains, and depreciation timing all affect the after-tax number. Use this for deal-vs-deal comparison; use after-tax modeling for personal allocation decisions.
Multiple vs. IRR

Why both numbers matter

Equity multiple = size of the win. 2.0x means you doubled. It ignores time, but it tells you the absolute return.

IRR = speed of the win. 2.0x in 3 years ≈ 26% IRR. 2.0x in 8 years ≈ 9% IRR. Same multiple, completely different deal.

Sophisticated investors look at both. A high IRR with a small multiple (30% IRR, 1.3x) is suspicious — short flip, hard to repeat. A high multiple with a low IRR (3x in 12 years) means slow but compounding nicely. The sweet spot for most operators: 2.0-2.5x multiple, 15-20% IRR, 5-7 year hold.

FAQ

Frequently asked questions

What is equity multiple?+
Equity multiple is the simplest measure of total return on a real estate deal: (total cash distributed back to investors + net sale proceeds) ÷ total equity invested. A 2.0x equity multiple means you got back $2 for every $1 you put in. It ignores the time it took — but it tells you the absolute size of the win.
What's a good equity multiple?+
Depends on hold period and risk. For a 5-year hold: 1.5-1.8x is mediocre, 1.8-2.2x is solid, 2.2-2.8x is strong, 2.8x+ is exceptional. For a 7-10 year hold: 2.0-2.5x is solid, 2.5-3.5x is strong, 3.5x+ is exceptional. Anything below 1.5x over 5+ years and you'd have done better in index funds with less risk.
How is equity multiple different from IRR?+
IRR is time-weighted — it cares when you get the money. A 2.0x equity multiple over 3 years is way better than 2.0x over 8 years (IRR is ~26% vs ~9%). Equity multiple tells you the size of the pie. IRR tells you how fast you got it. Sophisticated investors look at both. A high IRR with a small multiple (e.g., 30% IRR, 1.3x multiple) is suspicious — short-hold flip that's hard to repeat.
Should I count refinance proceeds in distributions?+
Yes. If you BRRRR a property and pull $50k out in a refi, that's a return of capital to you and counts toward equity multiple. Some pros separate 'cash-on-cash returns' (operating distributions only) from 'total equity multiple' (including refi proceeds). Both are valid views. For a complete picture, include refi proceeds.
What about depreciation tax savings?+
Equity multiple is typically calculated pre-tax. Including tax savings is non-standard but legitimate for personal decision-making — especially with cost seg + REPS. Just be explicit: 'pre-tax equity multiple of 2.1x; after-tax including depreciation shield it's 2.4x' avoids confusion when you're comparing to other deals or pitching investors.
Can equity multiple be less than 1.0x?+
Yes — and it's brutal. A 0.7x equity multiple means you lost 30% of your equity. This happens when the property is sold below acquisition cost, or rents collapsed and you bled out, or capex blew up the budget. The most common cause: forced sale into a soft market because the lender pulled the line or DSCR breached.
What's a 'preferred return' and how does it relate?+
Preferred return ('pref') is a guaranteed yield to LPs before the GP shares in profits. Typical pref is 7-10%. If a deal has 8% pref and 70/30 split above, the LP first earns 8% on capital, then any additional profit splits 70/30. Equity multiple captures all of this — you just look at the total LP cash returned. Pref structures don't change the multiple, they change who gets what.
How do I compare a 1.8x in 4 years vs a 2.2x in 7 years?+
Compute the IRR. 1.8x over 4 years ≈ 16% IRR. 2.2x over 7 years ≈ 12% IRR. The shorter hold wins on time-weighted return — assuming you can redeploy that capital into something comparable. If you can't (deal flow is slow), the slow longer deal may actually be better. This is why GPs prefer equity multiple in marketing and LPs prefer IRR.
How does leverage affect the multiple?+
More leverage = higher equity multiple (and higher risk). A property doubling in value with 80% LTV produces a 5-6x equity multiple on the down payment. The same property with all-cash purchase produces a 2x. Leverage amplifies both the win and the loss. Compare equity multiples across different leverage profiles only if you also compare the downside.
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