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Real Estate · Return

Equity Multiple

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Use equity multiple to summarize total deal return without annualizing it.

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Interactive workbench

Hold-period multiple

Total Cash DistributionsTotal Equity Invested

$420,000 returned on $300,000 invested equals a 1.40x equity multiple.

Step 1 of 3

Variables and units

  • Total Cash Distributions

    All cash returned to investors.

    currency

  • Total Equity Invested

    Total equity invested in the deal.

    currency

Common mistakes

  • Reading equity multiple as an annual rate.
  • Excluding interim cash flow from total distributions.

Step-by-step example

Hold-period multiple

  1. 1. Start with the example inputs

    • Total Cash Distributions$420,000
    • Total Equity Invested$300,000

  2. 2. Apply the formula

    Total Cash DistributionsTotal Equity Invested

  3. 3. Run the numbers

    1.4

    $420,000 returned on $300,000 invested equals a 1.40x equity multiple.

What this result means

An equity multiple of 1.4 means each dollar of equity came back as that many dollars in total — capital plus profit. It says nothing about time: a 1.4x in two years beats a 1.4x in ten, so read it alongside an annualized measure like CAGR.