2x Equity Multiple Over 5 Years
Receiving $200,000 on a $100,000 investment over 5 years produces a 2x equity multiple, a common real estate target.
How to use this tool
- Enter total distributions: all cash returned over the hold, including the sale.
- Enter the total equity you invested.
- Enter the holding period in years.
- Read the equity multiple and total profit.
- Use the average annual return as a rough yardstick — pair it with IRR for timing.
A 2x equity multiple means you doubled your money; over 5 years this equates to roughly a 15% annualized return.
Frequently asked questions
- What is a good equity multiple?
- It depends on the strategy and hold length. A 2.0x over five years is strong; the same 2.0x over fifteen years is mediocre. Always read the equity multiple alongside the holding period and, ideally, the IRR.
- How is the equity multiple different from IRR?
- The equity multiple measures total return and ignores time. IRR is time-weighted and accounts for exactly when each dollar comes back. Two deals with the same multiple can have very different IRRs.
- Does the equity multiple include leverage?
- Yes, implicitly. Distributions and invested equity are both measured on the equity (cash) you put in, so a leveraged deal's multiple already reflects the effect of financing on your returns.