Equity multiple answers the simplest and most satisfying question in investing: how many times did I get my money back? This free calculator gives you that number. Enter your total distributions and the total you invested, and you get the multiple.
Where IRR cares about timing, equity multiple ignores it and just tells you the total. A 2.0x means you doubled your money over the hold. Both numbers matter, and they are best read together. Here is the tool, then how to use it.
Equity multiple, in one line: it is total distributions divided by total invested. A 2.0x means you received twice what you put in over the life of the deal.
Read it with IRR: equity multiple ignores timing, so a 2.0x over three years is far better than a 2.0x over ten. Always look at it next to IRR.
The Equity Multiple Formula
The formula is equity multiple = total distributions ÷ total equity invested. If you invested $500,000 and received $1,000,000 back in total, including cash flow and your share of the sale, your equity multiple is 2.0x. Anything above 1.0x means you made money, and below 1.0x means you lost some.
Notice what it leaves out: time. A 2.0x is a great result in three years and a mediocre one over fifteen. That is exactly why equity multiple should never be read alone.
Why You Read Equity Multiple With IRR
IRR and equity multiple answer different questions and cover each other's blind spots. IRR tells you the annualized, time-weighted return but can flatter a quick deal, while equity multiple tells you the total cash returned but ignores how long it took. A deal can have a high IRR and a small multiple, or a big multiple and a modest IRR. I want both to be strong, and I explain how I use them together in this video.
Watch: Calculating Commercial Real Estate Investment Returns [Three Methods]
Equity Multiple FAQ
How do you calculate equity multiple?
Divide total distributions by total equity invested. If you put in $500,000 and got back $1,000,000, your equity multiple is 2.0x.
What is a good equity multiple?
It depends on the hold period and risk, but many investors look for a multiple around 1.5x to 2.0x or higher on a multi-year hold. A multiple must be judged against how long it took to earn.
What is the difference between equity multiple and IRR?
Equity multiple is the total cash returned relative to what you invested and ignores timing. IRR is the annualized return that accounts for timing, so investors use both together.
Does equity multiple include the return of my capital?
Yes. Total distributions include both your profit and the return of your original investment, so a 1.0x means you simply got your money back with no profit.
Ready to run a full deal, not just one metric?
Inside CRE Central you get the complete Deal Analyzer to underwrite a commercial property end to end, plus the training and feedback to do it with confidence.
Explore CRE CentralRead equity multiple next to the IRR calculator, or see all the commercial calculators.