When it comes to choosing between IRR and Real Estate Equity Investing, what path with you take? The professionals at Luxe Crowdfunding are here to keep you informed if you are to ever come across this decision. We offer one of the best crowdfunding sites for investors. Our real estate equity investment professionals are here to help.
What About The Internal Rate of Return?
Internal Rate of Return is the value that describes the sum of all future cash flows according to the time they occur. Because of this basic time-value of money, a dollar you have today is going to be worth more in the near future. The IRR reflect that the further in the future earnings from an investment receive, they less valuable they become.
Think about this:
- An offering’s IRR is often used to compare investment options with different funding levels and/or time-horizons to find the best application of funds during a set period of time.
- However, a project with a higher IRR does not necessarily mean it is a better investment. IRR calculations do not take into consideration the risk profile of a project or other variables potentially affecting the overall return.
What Will You Choose: Real Estate Equity Investing or IRR?
IRR and EM describe two different factors of any real estate investment, and both can be valuable information when considering an investment.
- For investors concentrated on the best application of funds over a shorter period of time, a stronger IRR might be more relevant.
- For investors looking for a long-term return much larger than the initial investment, an offering’s equity multiple might be the best metric to study.
In either case, the equity multiple helps to understand the actual amount of money coming back to the investor, but consider both when evaluating any real estate investment, and remember that neither guarantee financial performance.
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Luxe Crowdfunding is an investment management platform engaged in private equity and alternative investments across a range of real estate asset class, including multifamily, senior housing, and storage. We seek to generate outsized risk-adjusted returns by leveraging our experience, market analysis and proprietary network of relationships. As one of the top real estate crowdfunding sites, we have years of experience to help you succeed. We focus on opportunistic ground-up and value-add developments in six MSA’s (Chicago, Dallas, Denver, Houston, Minneapolis, and Orlando)
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When you get to the fork in the road, what path will you choose? Both real estate equity investing and IRR have their benefits. If you are interested in learning about real estate crowdfunding or even some more details about real estate investing be sure to call us today! We are experts in real estate ROI. Here at Luxe Crowdfunding, we are entirely here for you. Our investing experts have the best expertise in the United States. At Luxe Crowdfunding, we endeavor to excel in every service we provide, adding value for our investors wherever possible, and thereby succeeding nationally in the construction industry. We offer the best crowdfunding sites for investors.