IRR captures the full return picture — cash flow, appreciation, principal paydown, and refi/sale proceeds — weighted for when dollars arrive. Value-add multifamily typically targets 15–20% deal-level IRR.
Market & Valuation
IRR (Internal Rate of Return)
The annualized time-weighted return that makes the net present value of all a deal's cash flows equal zero.
More in Market & Valuation
- NOI (Net Operating Income)— Gross income minus operating expenses — excludes debt service, capex, and income taxes.
- Operating Expenses (OpEx)— Recurring costs of running a property — taxes, insurance, management, maintenance, utiliti…
- CapEx (Capital Expenditures)— Large periodic replacements — roofs, HVAC, water heaters, appliances — budgeted separately…
- Vacancy Rate— The percentage of time a rental is expected to sit empty between tenants.
- Cap Rate (Capitalization Rate)— NOI ÷ Purchase Price — the unleveraged annual yield of a commercial property.
- Cash-on-Cash Return— Annual pre-tax cash flow divided by the total cash you invested to acquire the deal.