What is IRR? | Internal Rate of Return + Equity Multiples in Real Estate Explained

What is IRR? | Internal Rate of Return + Equity Multiples in Real Estate Explained | RE for Noobs 5

Рет қаралды 10,080

Күн бұрын

0:00 Intro
1:24 An example with an analogy
3:58 Our definition.
The IRR (Internal Rate of Return) is a frustrating concept to learn because it's often taught using a very confusing definition. Derek explains the IRR using a definition we haven't seen anywhere else, using practical experience with how the metric is used in the real estate industry.
This is episode 5 in Real Estate for Noobs and builds on an analogy we used in the previous episodes to explain the relationship between NOI, Cap Rate, and Valuation: • NOI, CAP RATE, & VALUA...
Followed by How to increase your valuation with tactics to boost your NOI: • Video
Real Estate for Noobs is a series of short videos giving very simple animated explanations of the most critical aspects of our job as a commercial real estate developer. We discus both quantitative and qualitative approaches to making strategic decisions in real estate development, with lessons learned from over ten years of industry expertise from our team.
Episode 1: What is a Real Estate Developer? • What is a REAL ESTATE ...
Episode 2: Can Real Estate Developers be Ethical? • Can REAL ESTATE Develo...
Episode 3: The Relationship between NOI, Cap Rate, and Valuation • NOI, CAP RATE, & VALUA...
Episode 4: How to boost your Valuation by improving NOI • How to INCREASE proper...
Episode 5: What is IRR? • What is IRR? | Interna...
Episode 6: How we bought an $8m building and 8 lessons you can learn from it • 8 Lessons from How I B...
Episode 7: When should you use debt in real estate? • How to use debt to inc...
Episode 8: The Cap Stack Explained • What is the CAP STACK ...
Episode 9: The Waterfall Explained • WATERFALLS in Real Est...
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My name is Derek- I'm The Proptech Scout (and a real estate developer). I'm on a mission to find best-in-class proptech that real estate developers and landlords want to use, and I'm documenting it all on this channel and www.theproptechscout.com
Are you a proptech startup founder looking to get more exposure to customers? Or a real estate owner looking to improve efficiency through technology? For 1-on-1 advisory services, reach out to me on linkedin: / derek-hsiang-4576774
Music:
Clouds by Joakim Karud / joakimkarud
Music promoted by Audio Library • Clouds - Joakim Karud ...
#realestatefinance #CRE #realestateEducation #realestatedeveloper #privateequity

Пікірлер: 21

@postgradfit3084 3 жыл бұрын

"Equivalent Rate of Return in Retrospect" is the most functional explanation of IRR I found on YT. It's the first thing that comes to mind now when I see "IRR"! Thank you sir

@shauralpatel 2 жыл бұрын

O pick p0

@n.mat.4313 3 жыл бұрын

Thanks, man! I was stuck with the "NPV=zero"

@MelissaGalatas 3 жыл бұрын

I am a brand new agent working as a transaction coordinator for an investment broker. Your videos help so much! I have been picking up on the jargon, but the relationships between NOI, Cap Rate, and IRR have been stumping me and I've been conflating all three. Thank you for making this series!!! It's so helpful!

@TheProptechScout 3 жыл бұрын

Glad to hear it's been helpful!

@Dudeguy6816 3 жыл бұрын

So much better than anyone else. thanks!

@TheProptechScout 3 жыл бұрын

thanks!

@user-ot4jk1vt5f 9 ай бұрын

Super helpful! Thank you

@FizzFizzFizzFizzFizz 2 жыл бұрын

Greetings from Tech Startup land, had to learn more about IRR from a project I'm working in, and after about 5 videos you're the only one that helped me grasp what is going on. Thanks!

@TheProptechScout 2 жыл бұрын

Glad it was helpful!

@armandodelgado216 4 жыл бұрын

This is amazing. Good stuff !

@TheProptechScout 4 жыл бұрын

Thank you!

@antoniocruzcruz7758 2 жыл бұрын

Thank you sir!

@tomharpole9410 3 жыл бұрын

Bro turn up the gain on your mic! You're at -30dB which makes it very hard to hear.

@wylieschoonover4609 2 жыл бұрын

The video sound is pretty good, beyond my imagination

@rallegre100 3 жыл бұрын

I' didn't understand the explanation. $1M compound at 10.47% for 8 years is equal $2,217,880.87 . Does it make sense? If the total gain was $938,000. then the annual rate is 8.62%

@TheProptechScout 3 жыл бұрын

Here's the spreadsheet with the example calculation. It's a beginning of year 8 calculation rather than end of year 8. drive.google.com/file/d/1y2kef0NUdKztx9BvcXYQCRTdUMJ2l4qm/view?usp=sharing