The Equity Multiple Explained For Real Estate Investors [What You Need To Know]

Подписаться 86 тыс.

Просмотров 8 тыс.

50% 1

The Equity Multiple Explained For Real Estate Investors [What You Need To Know] //
The equity multiple is used in almost all commercial real estate investment materials, and similar to the IRR, this metric can be a really helpful tool, but it needs to be used correctly in order to be relevant.
And just like the IRR, two deals producing the same equity multiple values can have very different business plans and overall return profiles, but when used in conjunction with a few other key metrics, the equity multiple can help you paint a much clearer picture of the potential profitability of an acquisition or development.
So to give you some more clarity on this metric outside of the textbook definition, in this week's video, we’ll walk through what the equity multiple actually represents, the practical applications of this figure within commercial real estate, and some key things to look out for when relying on this metric to help tighten up your underwriting and value commercial deals.
💻 TRAINING & COURSES 💻
Enroll in the FREE Break Into CRE Real Estate Financial Modeling Crash Course here: www.breakintocre.com/free-cra...
Enroll in any Break Into CRE course here: breakintocre.com/courses/
Get access to all Break Into CRE courses, all models, and additional one-on-one support with a Break Into CRE Academy membership: breakintocre.com/the-academy
**💰 MY FAVORITE REAL ESTATE INVESTMENT PLATFORMS 💰
Crowdstreet: crowdstreet.4cl7.net/c/297573...
RealtyMogul: realtymogul.pxf.io/c/2975738/...
🕒 Timestamps 🕒
0:00 Introduction
1:01 The Equity Multiple Defined
1:32 Get Context
3:21 Benchmarking The IRR
7:06 Capital Contribution Treatment
9:49 How To Apply This To Real Estate Investment Analysis
#commercialrealestate #realestateinvesting
*Nothing in this video should be construed as tax, legal, accounting, valuation, or financial advice or recommendation. All information in this video is intended solely for educational purposes, and you are advised to consult with your own personal professional advisors regarding your personal investment decisions.
**AFFILIATE DISCLOSURE: Some of the links in this description are affiliate links, meaning, at no additional cost to you, we may earn a commission if you click through and make a purchase and/or create an account.

Опубликовано:

23 июл 2024

Ссылка:

Скачать:

Готовим ссылку...

Добавить в:

Мой плейлист

Посмотреть позже

Комментарии : 24

@BreakIntoCRE Год назад

Any other CRE finance metrics you'd like to see covered in more detail in a future video on the channel?

@petermarzo9882 Год назад

Maybe ROI vs. ROE in real estate?

@davidroldan6007 Год назад

Hi Justin In 8:10 why you subtracted the $200k from the $1.5m in the numerator?

@BreakIntoCRE Год назад

@@davidroldan6007 apologies if this was confusing - this was showcasing the incorrect way to calculate this, including the $200K additional equity investment in the numerator of the calculation (rather than the denominator). This $200K amount should be added to the initial $1MM investment in the denominator, resulting in the 1.25x equity multiple shown.

@davidroldan6007 Год назад

One of my favorite metrics for long term wealth creation.

@BreakIntoCRE Год назад

Agreed!

@robertnozick2235 Год назад

Would love to see a video on the differences between GP's and LP's such as day to day work, skills required, compensation, deal flow and geographic regions etc

@BreakIntoCRE Год назад

Great feedback, Robert! Thanks!

@smacnee3278 2 месяца назад

Amazing, thank you.

@marioarcari7649 Год назад

Great Content

@BreakIntoCRE Год назад

Thanks, Mario!

@petermarzo9882 Год назад

Awesome video

@BreakIntoCRE Год назад

Thanks for your continued support, Peter!

@hajirabegum2546 Год назад

I am worrking in due diligence (cre) interested in cre financial analyst please let me know courses I have to complete or what are the skills required.

@simfinso858 Год назад

Hey Thanks for the video.This is Really helpful. Cash on cash multiple video is also required for me. If You could give me link that will be very helpful for me.

@BreakIntoCRE Год назад

Glad it was helpful! Cash-on-cash video is linked here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-WmSD1na8xK8.html&pp=ygUiYnJlYWsgaW50byBjcmUgY2FzaCBvbiBjYXNoIHJldHVybg%3D%3D

@codeinejesus4033 Год назад

Any thoughts on starting as a financial analyst to enter into a real estate analyst role? There aren't many analyst level roles available in my area.

@BreakIntoCRE Год назад

There are a lot of transferrable skills you can take from a general financial analyst role and apply to a real estate analyst position - not a bad place to start out if CRE options are limited in the short-term.

@user-wl8yc1uk9o 9 месяцев назад

Would these return metrics be calculated after the hold period or could they estimated before a purchase?

@JDG.RealEstate 6 месяцев назад

Equity Multiple takes into account the amount of money invested and the amount you receive back. It doesn’t take into account time. However, it is kind of implicit that you are taking into account all the contributions and cash flows from the moment of acquisition all the way through disposition.

@davidpartington7847 Год назад

Can you guys help me get an analyst job in the RE sector with CFI certification and your courses? No university or college degrees. Lots of practical experience in my own small-scale deals.

@BreakIntoCRE Год назад

Hey David, it does tend to be an uphill battle to land an analyst job without a 4-year degree at the vast majority of CRE firms. Our courses can give you the skill set you'll need to land (and succeed in) these types of roles, but many firms won't even entertain resumes that don't include a 4-year degree of some kind, regardless of technical skill set. I've found that looking for jobs at smaller, more entrepreneurial firms that can look past this tends to be the best bet for people without university degrees, so that could be an avenue to explore. Happy to have you in our courses if you think they might be a fit!

@stevecartwright3076 Год назад

I went to the website to see how I could sign up, but I would’ve liked a contact option before I spent the money. There’s no way to contact this organization as the website has no contact option for potential customers. This is very unethical to say the least. and very out of the norm for most organizations soliciting services in real estate. I’m wary to say the least if I have no way of contacting a host before I spend $800 a year! I welcome their feedback but I don’t expect it.