Equity Multiple Calculator
Calculate the equity multiple of a real estate deal or private investment — total cash distributions ÷ equity invested — with total profit, average annual return and the equivalent annualized return.
How it works
Equity multiple = total cash distributions ÷ total equity invested · total profit = distributions − equity · average annual return = (multiple − 1) ÷ years · CAGR = multiple^(1/years) − 1
The equity multiple is the headline return figure in real estate syndications and private equity: how many times your money came back. It counts all cash returned — operating distributions plus sale or refinance proceeds — but ignores when it arrived, so a 2.0x over 3 years is far better than a 2.0x over 10 years. That is why sponsors quote it next to the IRR; the CAGR shown here is the IRR only if all cash came back at the end, so the true IRR of a deal with interim distributions is higher.
Worked example
An investor puts in 100,000 and receives 185,000 in total distributions over 5 years. The equity multiple is 185,000 ÷ 100,000 = 1.85x, a profit of 85,000. The simple average annual return is 0.85 ÷ 5 = 17.00%, and if all the cash had arrived at the end the annualized return would be 1.85^(1/5) − 1 = 13.09%.
Sources: PropertyMetrics — How the equity multiple works in commercial real estate · CommercialRealEstate.loans — Equity multiple
Frequently asked questions
What is a good equity multiple?
For a 5–7 year value-add real estate deal many investors look for about 1.7x–2.0x; core, low-risk deals often project 1.4x–1.6x. Always judge it against the holding period and the IRR.
Equity multiple vs IRR — which matters more?
Use both. The multiple shows total wealth created; the IRR shows how fast it was created. A high multiple with a low IRR means a long wait; a high IRR with a low multiple means a quick but small gain.
Does the equity multiple include my original capital?
Yes. Distributions include the return of your capital, so 1.0x means you only got your money back and anything above 1.0x is profit.
Why is the CAGR lower than the average annual return?
The simple average divides total profit by the years without compounding. The CAGR assumes the gain compounds and is all paid at the end, which always gives a lower yearly figure for multiples above 1.
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Educational estimate, not investment, trading or tax advice. Brokers, issuers and data providers use their own conventions, fees and figures — confirm with your broker, the issuer’s documents or a licensed adviser before acting.