Equity Multiple: How Many Times You Get Your Money Back

Equity multiple is the total cash you get out of a deal divided by the total cash you put in. A 1.0x means you got your money back. Anything above that is profit, and anything below it is a loss.

Equity multiple = total distributions ÷ total equity invested

Distributions include cash flow during the hold plus what you net when you sell or do a cash-out refinance. Equity includes your down payment, closing costs, out-of-pocket rehab and any later capital calls.

A simple example

Example, round numbers. You invest $80,000 in a rental. Over five years it pays you $30,000 in cash flow. You sell and net $130,000. Total back: $160,000. Equity multiple: $160,000 ÷ $80,000 = 2.0x.

The blind spot: time

Equity multiple ignores how long it took. Doubling your money in two years is far better than doubling it in ten. That is why investors pair it with internal rate of return (IRR), which accounts for timing.

Where it helps

It is useful for comparing different strategies on one scale: a quick flip, a BRRRR (buy, rehab, rent, refinance, repeat) with a cash-out, a long hold, or a ground-up build.

Why it matters to you

Equity multiple shows how much you made. IRR shows how fast. Look at both, plus cash-on-cash, before choosing between deals. On a projected deal, run it on conservative sale and rent numbers, not best-case ones.

RSC Private Lending has programs for each of those strategies: Fix & Flip, Bridge, New Construction, and DSCR Rental, which allows cash-out refinances up to 75% LTV. Send us your scenario for a term sheet in 24 hours. Subject to underwriting.