IRR Explained for Real Estate Investors (Is Internal Rate of Return the Best Metric?)

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  • Опубликовано: 10 июл 2024
  • IRR EXPLAINED FOR REAL ESTATE INVESTORS (IS INTERNAL RATE OF RETURN THE BEST METRIC?) / The Internal Rate of Return (IRR) is a metric used to measure a real estate investment's performance. But it is commonly misunderstood and confused by investors analyzing potential real estate investment opportunities. In this video, I walk you through what IRR (internal rate of return) actually does, why you should use IRR, and how it affects your real estate investment portfolio.
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    • IRR Explained for Real...

Комментарии • 11

  • @amp7816
    @amp7816 2 года назад +14

    Thanks for the vid, Seth. It would also be helpful if you showed the math on how you came to the percentages for each option and the annual returns. How did you come up with 15.84% return and how did you that % to get $10k per year and $150k in year 5?

    • @user-jf5it6gh9u
      @user-jf5it6gh9u Год назад

      do we not have an answer to it lol?

    • @nathangrooms3847
      @nathangrooms3847 Год назад +1

      The 15.84% comes from an actual IRR formula that's fairly complex. There's an IRR function in Excel that most underwriters use. Also the 150K in year 5 is coming from this disposition of the property. The investor isn't just making 10K again...they are making their percentage of the sale proceeds in year 5 as well.

  • @kartchnerkustoms8768
    @kartchnerkustoms8768 2 года назад +1

    Great information Seth! You do an awesome job with explaining. Thanks for sharing your knowledge!

  • @christinetong5037
    @christinetong5037 Год назад

    Great explanation!!

  • @yeabenmedia7298
    @yeabenmedia7298 Год назад

    Love this

  • @sebastianwaseskuk8669
    @sebastianwaseskuk8669 Год назад

    where is the link to the value add process that you mentioned at minute 4?

  • @blakepugh8680
    @blakepugh8680 10 месяцев назад

    i would have liked for you to explain the math instead of just saying its 15.84% so that way we get a better understanding but thank you for your time.

  • @abdesign7214
    @abdesign7214 4 месяца назад

    Before he corrected the $1m, I was thinking great am I lost already?? 🤦🏻‍♂

  • @Palantir_Daily
    @Palantir_Daily 8 месяцев назад

    You left a lot out. Appreciation? You mention cost segregation but didn’t include the deductions, and principal pay down? IRR is much higher

  • @christopher32472
    @christopher32472 3 месяца назад

    That’s a million you 🙄 nice job duh