Long-Term Analysis
Multi-year IRR projection with loan amortization, exit proceeds, and the full lifetime return on a deal. The one Austin uses when a client wants to compare two investments with different hold periods — not just what a property earns, but what it earns per year, for every year you own it.
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Every figure updates as you type — the defaults are typical Indianapolis numbers.
Full lifetime return · 10-year hold
Indianapolis benchmarks
10–15%
Levered IRR most buy-and-hold investors underwrite toward
6–8%
Typical all-in selling costs — commissions, title, and transfer taxes
2–4%
Historically modest Indianapolis annual appreciation — underwrite conservatively
1.5–2.0x
Equity multiple a solid 10-year levered hold often produces
Every number in the tool above comes from these formulas — nothing hidden.
The IRR equation
0 = −Investment + Σ [CFₜ ÷ (1 + IRR)ᵗ]
IRR is the discount rate that makes the present value of every cash flow — what you put in and everything you get back — exactly equal. It’s the annualized rate the whole hold actually earns.
Net sale proceeds at exit
Proceeds = sale price × (1 − selling cost %) − remaining loan balance
Selling costs (commissions, title, transfer taxes) typically run 6–8% all-in. The remaining balance comes from the loan’s amortization schedule, not a guess.
Remaining loan balance
Balance = Loan × [(1+r)ⁿ − (1+r)^months paid] ÷ [(1+r)ⁿ − 1]
Amortization pays mostly interest early and mostly principal late — which is why longer holds produce larger payoffs at exit and higher IRRs.
Equity multiple
Equity multiple = total cash returned ÷ cash invested
The plain-language companion to IRR: a 1.7x means every dollar you put in came back with 70 cents of profit. IRR tells you the speed; the multiple tells you the size.
Annual cash flow with growth
CFₜ = year-1 cash flow × (1 + growth rate)^(t − 1)
Rents and expenses both creep upward — the growth input models net drift. Indianapolis rent growth has historically tracked in the low single digits.
A dollar today is worth more than a dollar next year — you could invest it, and inflation is quietly eating its purchasing power either way. "Discounting" is just running that logic in reverse: a dollar received next year is worth less today, by whatever rate you could have earned on it in the meantime.
That rate — your opportunity cost — is the yardstick IRR is built against. If you can earn 5% with little risk elsewhere, a project returning exactly 5% creates nothing for you; a project returning 12% pays you 7 points of real reward for taking it on. IRR converts every lumpy, irregular cash flow a property produces into that one comparable annual percentage.
Internal rate of return is the discount rate at which the net present value of all your cash flows equals zero. In plain English: it’s the single annualized percentage that describes the entire hold — the initial investment, each year’s cash flow, and the final sale check.
That matters because two deals can both "make money" at wildly different speeds. A property that doubles your cash in 5 years and one that doubles it in 15 are not the same investment, and cash-on-cash return alone can’t tell them apart. IRR can — it weights every dollar by when it actually arrives.
IRR is a projection-dependent metric built on estimates that are notoriously hard to predict, which is why professionals never use it alone. When cash flows flip sign more than once — for example a mid-hold capital call after steady distributions — the math can produce multiple IRRs; and if a deal never turns a profit, no rate solves the equation at all.
The professional habit is scenario analysis: run the same model at your base case, a downside (slower growth, weaker exit), and an upside. If a deal only clears your hurdle in the upside case, the model has told you something the single number wouldn’t. This calculator makes running those scenarios cheap — change two inputs and watch the IRR move.
IRR measures speed; equity multiple measures size. A project returning your capital quickly can show a sparkling 30% IRR while producing only a 1.5x multiple over two years — fast money, but not much of it. A long hold can trundle along at a 9% IRR and still stack a 2.2x multiple over fifteen years.
Read them together. A high IRR with a low multiple means a quick, small win; a modest IRR with a high multiple means patient, large compounding. Indianapolis buy-and-hold tends toward the second profile — which is exactly why the IRR screen alone undersells it and the multiple tells the rest of the story.
For levered Indianapolis buy-and-hold deals, most experienced investors underwrite toward 10–15% IRR and treat anything above that with suspicion — very high projected IRRs usually come from aggressive exit or appreciation assumptions. Unlevered returns on solid properties often land in the 7–9% range. Judge any IRR against your own opportunity cost, not a leaderboard.
The solver couldn’t find a rate where the cash flows break even — usually a sign the inputs need attention. Check that cash invested is positive, your sale price exceeds the remaining loan balance plus selling costs, and the hold is at least a year. It can also happen when the deal genuinely never turns a profit — which is the model doing its job.
Cash-on-cash measures annual yield on invested cash, treating every year the same and ignoring the exit. IRR annualizes the entire hold — including appreciation and sale proceeds — and weights every dollar by when it arrives. Use cash-on-cash to judge monthly income; use IRR to compare complete investments end to end.
No. ROI is total profit divided by total invested and ignores time entirely. IRR annualizes the return and accounts for when each dollar arrives. A 100% ROI over 4 years is roughly a 19% IRR; the same ROI over 20 years is closer to 3–4%.
Treat a cash-out refinance as a partial return of capital: reduce your invested cash by the proceeds pulled out, and let the larger remaining loan balance flow through to smaller exit proceeds. Both changes move IRR — sometimes dramatically — so model the refi as a deliberate scenario rather than a hope.
No — the model is pre-tax. Depreciation shelters much of your annual cash flow during the hold, but accumulated depreciation is recaptured at sale (25% federal) alongside capital gains, and a 1031 exchange can defer both. Run the model pre-tax here, then work the after-tax picture with your CPA.
Run it three times: base case with conservative assumptions, a downside with zero appreciation and slower rent growth, and an upside you’d actually defend. If the deal only works in the upside, walk. The calculator makes each run a 30-second exercise — that’s the point of having it.
These calculators are educational tools. Good underwriting still depends on accurate rents, expenses, financing, repairs, vacancy, management, and local market judgment.
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