Metrics
Equity Multiple
Total cash returned (cash flow + net sale proceeds) ÷ total cash invested. 2.0× means you doubled your money over the hold.
Buy-and-hold investors typically target 1.8–2.5× over a 10-year hold.
How it's calculated
Equity Multiple = Total Cash Returned ÷ Total Cash InvestedExample
Invest $80k, collect $70k of cash flow over 10 years, then net $120k at sale → ($70k + $120k) ÷ $80k = 2.4×.
Why Equity Multiple matters
Unlike IRR, the equity multiple ignores timing and answers the blunt question: how many times did I get my money back? Read the two together — IRR is the speed of the return, the multiple is its size.
Related terms
IRR (Internal Rate of Return)
Annualized return over the full hold period, including cash flow, principal paydown, appreciation, a…
Cash-on-Cash Return
Annual cash flow ÷ total cash invested (down payment + closing + rehab). Tells you how hard your mon…
Monthly Cash Flow
Rent minus operating expenses minus mortgage payment. The cash that lands in your account each month…
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