Finance & Returns Internal Rate of Return (IRR) The annualized return that makes the net present value of all cash flows zero.
Finance & Returns Levered Cash-on-Cash Annual cash flow after debt service divided by equity invested.
Finance & Returns Levered IRR The IRR of an investment using debt financing, which can amplify returns and risk.
Finance & Returns Levered Yield on Cost Stabilized NOI minus debt service divided by equity invested.
Finance & Returns Modified IRR (MIRR) An IRR variant assuming a more realistic reinvestment rate for interim cash flows.
Finance & Returns Net Operating Income (NOI) Gross income minus operating expenses, excluding debt service and capital expenditures.
Finance & Returns Net Present Value (NPV) The present value of future cash flows minus the initial investment.
Finance & Returns Net Yield Income after expenses divided by purchase price, expressed as a percentage.
Finance & Returns Operating Expense Ratio (OER) Operating expenses divided by gross income, expressed as a percentage.
Finance & Returns Payback Period The time required to recover the initial investment from cash flows.
Finance & Returns Real vs. Nominal Return Real return is inflation-adjusted; nominal is the stated return.
