Equity Multiple

Equity multiple is a real estate return metric that shows total cash returned to investors compared with the equity they put in. It is calculated as total cash distributions ÷ total equity invested, including operating distributions and sale proceeds over the investment period. A 2.0x equity multiple means investors received twice their original equity back, but it does not show how quickly those returns were earned.

A multifamily owner invests $5 million of equity in a 200-unit property. Over five years, the property distributes $1.5 million from operations and returns $6 million after sale, for $7.5 million total cash returned. The equity multiple is $7.5 million ÷ $5 million = 1.5x.

Equity multiple helps operations leaders understand how day-to-day performance can affect total owner returns. Improving revenue, controlling operating expenses, and planning capital projects can influence cash distributions and sale proceeds, which are the inputs behind the metric. Because equity multiple does not account for timing, it is often reviewed alongside measures such as IRR and cash-on-cash return.