How to Calculate Internal Rate of Return (IRR) for Real Estate Investing
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This video explains what an internal rate of return (IRR) is and how you can use it to evaluate real estate investments (including how to use the formula in an Excel or Google Slides spreadsheet). You'll also get practical examples of both unleveraged and leveraged internal rates of return and the pros and cons of using the IRR formula.
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Amortization Calculator: http://bretwhissel.net/amortization/amortize.html
NEXT VIDEO: Cap Rate Explained (Plus a Formula I like Better): https://youtu.be/9X_1k1w6u3c
How to Analyze a Rental Property (No Calculators or Spreadsheets Needed!)
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TIMESTAMPS:
0:00 - Intro
0:25 - What is IRR?
2:33 - Warren Buffet & Aesop's Fable
4:20 - IRR example NO debt
10:57 - IRR example WITH debt
14:22 - Pros and Cons of IRR
20:17 - Closing thoughts
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Тэги:
#irr #irr_explained #internal_rate_of_return #internal_rate_of_return_explained #irr_example #internal_rate_of_return_example #irr_calculation #internal_rate_of_return_calculation #what_is_irr #what_is_internal_rate_of_return #irr_formula #how_to_calculate_irr #how_to_calculate_internal_rate_of_return #coach_carson #cap_rate #net_present_valueКомментарии:
Why does the format change from rental inputs to financial when doing debt vs no debt. That threw me way off.
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Love the podcast and in the middle of your new book which brought me to this video. Great stuff! How does the IRR change if you want to refinance a property?
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Random Question- what market analysis is used to determine the end sale price of the property to know that it can sell for 400 at the end of year 5?
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I'm not sure if anyone will be able to answer this, but I've been stuck on this for a while. Why exactly would a higher IRR be more risky? Why would a lower IRR be safer? What about it determines the risk
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lol keep up the funny stuff
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I’m so confused how you got the annual average of $8,232, $8,479, etc on the Leveraged IRR and I’ve spent 30 mins trying to figure it out!
Please explain and hopefully you see this and respond asap cus now I’m in this rabbit hole and my brain hurts 🤣😭😭
Hey Coach Carson! How did you calculate the "After tax net income" and "After tax rental cash flow per year"? Could you break down the math? Thanks!
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Bueno
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In order for the IRR to take into account the time value of money, dont we have to input inflation?
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What’s discounting rate used in IRR?
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Great vid thanks for the content, quick question what if we just want to see the IRR on a 3 year plan or more than 5 years?
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Legend!
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Lol the best . . . by far . . . best explanation of IRR!!
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Awesome explanation and teaching style, great spreadsheet. Been a fan a long time.
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Love your videos Coach! thank you so much!
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Great breakdown! I find I have to be careful with.Calculations because it I am reliant on spreadsheets, I tend to miss the most fundamental elements such as the property being in an area that I do not want to be in etc. With all that said, I appreciate the education on a more technical analysis of the numbers!
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Since we're going down this wonderful numbers path.....can we do a MIRR video, Coach?!!!!
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Always amazing content. Thumbs'd. Still haven't done a deal yet 😕
In any case just wanted to say I think IRR can return various values if there is a negative number in the series of cash flows. In which case MIRR would be the better option
🙋♂️MIRR video please!!!
Would love to see a breakdown of IRR vs NPV and the assumptions that feed both
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Thanks coach. I’ve published an app on iOS called “Rental & Mortgage Calculator”, I hope it’s useful for your audience.
Any feedback is highly appreciated.
Keep up the good work!
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