Real Estate Metrics 101: Issue 4

We’ve looked at returns, operations, and debt. Now, let’s talk about the big picture: total returns, future value, and exit strategy. These are the numbers that help you build long-term wealth and plan your investment life cycle.

💰 Equity Multiple

The total amount of money you get back compared to what you invested.

Why it matters:

• A multiple of 2.0x means you doubled your investment. $1 in and $2 out.

• It shows total profit, not just annual returns.

🔍 Best when paired with IRR for full context.

📈 Appreciation Projections

The expected increase in property value over time due to market growth or improvements.

Why it matters:

• Drives exit value and refinancing potential.

• Can boost your returns even if cash flow is moderate.

🔨 Value-add investors often target forced appreciation through renovations or rent increases.

💼 Exit Cap Rate / Sale Price Metrics

Projected value at sale based on your anticipated Cap Rate at exit.

Why it matters:

• Planning your exit well helps you optimize timing.

• Small changes in Exit Cap Rate can significantly impact sale value.

📊 Even a 0.5% difference in Exit Cap can shift your sale price by hundreds of thousands.

🤌 That’s a wrap on our Real Estate Metrics 101 series!

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