Real Estate Financial Modeling Tools

Truly Understanding IRR In Real Estate Transactions



Academic / U.S. Military Price – $39.00

To get Academic pricing, click Academic Verification in the header and follow the instructions. Once you have Academic status, the discounted pricing will show in your cart.

Sample Content

SKU: Self Study, IRR Categories: ,

IRR, or Internal Rate of Return, is one of the most widely used yet least understood real estate investment performance measurements.

This self study product is an interactive Video Tutorial in which you will come to truly understand the nature of the IRR calculation and see why it reacts the way it does in the various acquisition and development cases that are presented in spreadsheet form.

By the end of the lesson, you will be able to clearly explain IRR in plain English to someone who has never studied finance. You will follow along in Excel in real time and perform exercises to ensure you are grasping the lesson and are mastering the technical skills being taught.

Product includes the following items, which never expire:

 Online access to an easily navigated 43-minute Video Tutorial, playable on any device including PC, Mac, phones and tablets


 Accompanying fully-unlocked Excel file, compatible with both PC and Mac

Topics Covered

  • Time value of money crash course: Present Value, Future Value and Net Present Value
  • The nature of the IRR calculation, and how the IRR value changes during a transaction
  • Equivalent Annual IRR rates for quarterly-, monthly-, and daily-based IRR calculations
  • Why a monthly-based IRR is more accurate than an annual-based IRR
  • Relationship between the IRR and the Equity Multiple
  • What IRR tells us, and what it doesn’t tell us
  • IRR for acquisitions and development examples

Excel Formulas and Functions Taught

  • PV – Present Value
  • FV – Future Value
  • NPV – Net Present Value
  • IRR – Internal Rate of Return
  • XNPV – NPV for non-periodic cash flows with known dates
  • XIRR – IRR for non-periodic cash flows with known dates

Video Tutorial Contents

  • Introduction
  • Time Value of Money Crash Course (9 min)
  • Time Value of Money – 1-Year Timeline Tab (Section)
  • Net Cash Flow/Return On Capital (1 min)
  • RATE (Growth/Discount Rate) (30 sec)
  • PV and FV (10 sec)
  • NPV (Net Present Value) (1.5 min)
  • NPV from Monthly Cash Flows (30 sec)
  • Equivalent Annual Rate (EAR) (1 min)
  • IRR Function (Internal Rate of Return) (1 min)
  • IRR from Monthly Cash Flows (1 min)
  • IRR vs. NPV (2.5 min)
  • How The IRR Changes Over A Transaction’s Timeline (2 min)
  • TVM and Financing – 5-Year Timeline Tab (Section)
  • IRR vs. Equity Multiple (4 min)
  • XNPV and XIRR (2 min)
  • IRR Progression Over Transaction Timeline (3 min)
  • Condominium Transaction Example (3 min)
  • IRR Illustration Tab (3 min)
  • Review In Plain English (3 min)
  • Monthly vs. Annual IRR Accuracy (2 min)
  • Acquisition and Development Examples (1 min)
  • Alternate Periods of Compounding (30 sec)

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