Calculator
Equity Multiple Calculator for Real Estate
The equity multiple is total cash distributions plus sale proceeds divided by total equity invested. If investors put in $1 million and receive $1.9 million in total over the hold, the equity multiple is 1.9x, meaning they made back their capital plus 90%.
Formula
How underwriters use it
Equity multiple shows total profit relative to capital and is easy to explain to investors.
Because it ignores timing, sponsors pair it with IRR; a 2.0x over ten years is a far weaker result than 2.0x over four.
Frequently asked questions
What is a good equity multiple in real estate?
Value-add real estate is often underwritten to roughly 1.6x to 2.0x over a typical hold, with core deals lower and opportunistic deals higher. The right figure depends on hold length and risk.
Is equity multiple the same as ROI?
They are closely related. Equity multiple minus one equals total ROI over the hold, so a 1.8x equity multiple is an 80% total return before considering time.
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