Equity Multiple

The total cash returned to an investor divided by the total equity invested. An equity multiple of 2.0x means you doubled your money. Unlike IRR, it doesn't account for the time it took to achieve the return.

Key Points

Understanding equity multiple is essential for evaluating real estate investments
This metric helps investors compare opportunities objectively
Our Free Snapshot tool automatically calculates relevant metrics for any property

Related Terms

Internal Rate of Return (IRR)

The annualized rate of return that makes the net present value of all cash flows equal to zero. IRR accounts for the time value of money and is used to evaluate investment profitability over the entire holding period, including the sale.

Cash-on-Cash Return

A metric that measures the annual pre-tax cash flow relative to the total cash invested in a property. Unlike cap rate, it accounts for financing and shows your actual return on invested capital. Formula: CoC = Annual Cash Flow / Total Cash Invested × 100.