Equity Multiple

Total cash returned divided by total cash invested — shows how many times you multiplied your money.

The equity multiple tells you the total return in dollar terms across the entire hold period, regardless of time.

Equity Multiple = Total Cash Distributions ÷ Total Cash Invested

Example: Invest $100,000 → receive $50,000 in cash flow + $200,000 at sale = $250,000 total → Equity Multiple = 2.5x (you tripled your money).

Equity multiple and IRR are used together — a 2.5x over 5 years is better than 2.5x over 10 years. Always pair equity multiple with IRR to understand both magnitude and speed of returns.

Related Terms

Cash-on-Cash Return

Annual pre-tax cash flow divided by total cash invested.

Internal Rate of Return (IRR)

The annualized return rate that makes the net present value of all cash flows equal to zero.

Return on Equity (ROE)

Annual cash flow divided by your current equity in the property — measures efficiency of deployed capital.