Returns

What Is the Equity Multiple?

The equity multiple is the total cash a deal returns divided by the total equity you put in, over the full hold.

Equity multiple = Total distributions ÷ Total equity invested

A 2.0x equity multiple means you received twice the cash you invested, counting every distribution plus your share of the sale. Unlike IRR, it ignores timing, so it answers "how much did I make in total" rather than "how fast." The two are read together: a high IRR on a short hold can still be a modest multiple, and a strong multiple over a long hold can be a mediocre IRR.

RVP Underwriter reports the projected equity multiple alongside IRR and cash-on-cash return on every deal.

Related terms

• Internal Rate of Return (IRR)
• Cash-on-Cash Return
• Cap Rate

Part of the RVP Underwriter glossary of income-property underwriting terms. Browse all definitions, or put them to work with the free calculators.