IRR Calculator.
Adjust your investment amount and hold period to see how different IRR scenarios compound over time.
Projections use compound annual growth and are illustrative only. Actual returns vary by deal, market, and timing.
Understanding IRR — and why it matters.
IRR is the single most-cited performance metric in private real estate, but it's frequently misunderstood. Before you evaluate any syndication or fund offering, it pays to know exactly what the number represents — and what it doesn't.
IRR (Internal Rate of Return)
IRR is the annualized rate of return on your invested capital, accounting for the timing of every cash flow — distributions during the hold and the final sale proceeds at exit. Unlike a simple percentage, IRR rewards investments that return capital faster.
Why Time Matters
A 2x return in 3 years is dramatically better than a 2x return in 7 years. IRR captures this because money returned sooner can be reinvested. In multifamily syndications, this is why refinances and shorter hold periods often outperform on an IRR basis.
IRR vs. Equity Multiple
Equity Multiple (EM) tells you the total dollars returned per dollar invested — a 2.0x EM means you doubled your money. IRR tells you the speed of that return. Sophisticated investors evaluate both: EM for total wealth created, IRR for capital efficiency.
What We Target
Momentum underwrites value-add multifamily deals targeting 15%+ IRR and 1.8x–2.2x EM over a 3–5 year hold. The 10% / 15% / 20% scenarios above mirror conservative, target, and upside cases we model on every acquisition.
Three scenarios. One question: what could your capital become?
Conservative (10% IRR) reflects a downside case — what happens if rent growth stalls, cap rates expand at exit, or business plan execution lags. Still a credible result for a stabilized asset.
Target (15% IRR) represents our base-case underwriting — value-add execution complete, market-rate rents achieved, sale at a reasonable cap rate. This is what we plan around.
Upside (20% IRR) assumes favorable tailwinds — accelerated rent growth, cap rate compression at exit, or a strategic refinance that returns capital early. Always possible, never promised.
— What IRR Doesn't Tell You
IRR assumes you can reinvest distributions at the same rate — which is rarely realistic. It also doesn't capture risk, leverage, tax treatment, or the sponsor's track record. A 25% IRR projection from an unproven operator is worth less than a 15% projection from a sponsor with twelve full-cycle exits. Always evaluate the team alongside the math.