Equity multiple is the total cash an investor receives from a deal divided by the equity they put in. If an investor puts in 4.0 million and gets back 7.3 million over the life of the deal, the equity multiple is 1.83x. It tells you how many times your money came back, not how fast.
The formula
Equity multiple = total cash received ÷ total equity invested.
Total cash received includes every distribution during the hold plus the net proceeds when the property is sold or refinanced. A multiple of 1.0x is break-even. Anything above is profit.
A worked example (hypothetical numbers)
An investor puts 4,000,000 into a five-year deal.
- Annual distributions: 280,000 for 5 years = 1,400,000.
- Net sale proceeds in year 5: 5,900,000.
- Total cash received: 7,300,000.
- Equity multiple: 7,300,000 ÷ 4,000,000 = 1.83x.
The IRR of the same cash flows is about 14.2%. The numbers are invented for illustration.
Why the multiple alone can mislead
Now suppose a second deal returns the same total, 7,300,000, but all of it arrives at the end of year three. The equity multiple is the same 1.83x. The IRR is about 22.2%, because the money came back sooner. The first deal has more cash arriving earlier, the second has a shorter life.
That is why investors read equity multiple with IRR and cash-on-cash return. The multiple shows the size of the gain; IRR shows the speed.
Gross and net multiples
A property-level model usually shows a gross multiple, before fees and the sponsor's share of profits. Investors receive a net multiple, after them. Always ask which one a number is. How profits are shared is set by the distribution waterfall.
What equity multiple does not replace
It does not measure risk, and it does not say how the cash flows are timed. It does not replace IRR, a sensitivity analysis or an investor's own targets. Titleman's underwriting run builds equity multiple, IRR and NPV in a live Excel file, with every input showing its source and every result its formula, in about 58 minutes at the median on production runs in the 30 days to 18 October 2026. It does not give a final price or a buy verdict.
Common questions
How do you calculate equity multiple? Add up all the cash the investor receives, including distributions during the hold and net sale proceeds, and divide by the equity invested. An investor who puts in 100 and receives 180 in total has an equity multiple of 1.8x.
What is a good equity multiple? It depends on the strategy and the hold period. A core deal may target a lower multiple over a long hold, a value-add or development deal a higher one over a shorter hold. Compare multiples only with the hold in view.
What is the difference between equity multiple and IRR? Equity multiple measures how much cash comes back. IRR measures how fast it comes back. The same multiple over three years is a much higher IRR than over seven, so read the two together.
Does equity multiple include the original investment? Yes. An equity multiple of 1.0x means the investor got back exactly the equity put in. Anything above 1.0x is profit, so a 1.8x multiple means 0.8 of profit for each 1.0 invested.
Published by Titleman, which makes the AI engine mentioned on this page. Written by the Titleman team with AI assistance. Updated 19 October 2026.