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| Name | IRR vs. NPV - Which To Use in Real Estate [& Why] |
| Video Uploader | Video From Break Into CRE |
| Upload Date | This Video Uploaded At 30-09-2021 07:30:05 |
| Video Discription | IRR vs. NPV - Which To Use in Real Estate [& Why] // If you take any basic corporate finance class in college or grad school, one of the first concepts you’re going to learn is the Net Present Value (NPV) analysis, and how to use that analysis to make decisions on investment opportunities you might be considering. However, a very close relative to the NPV calculation is the Internal Rate of Return (IRR), and some of the most frequently asked questions we receive in our courses and Break Into CRE Academy are around which metric to use in an analysis, and why one might be preferable over the other. The NPV and IRR are both unique in that these are both time value of money functions, where cash flows received earlier on in the analysis period are worth more than those same cash flows received later on in the analysis period. However, even though these metrics are similar in their mechanics, the end products of these calculations look substantially different from one another, making one of these metrics far more helpful in real estate analysis, especially when presenting to investors. So to answer a frequently asked question that you might also have, in this video, we'll break down what the IRR and NPV each actually are, how these two metrics play together (from a real estate standpoint), and which metric tends to win out when it comes to real estate financial modeling and valuation. Enroll in the free Break Into CRE Real Estate Financial Modeling Crash Course here: https://www.breakintocre.com/free-crash-course Check out all Break Into CRE courses here: https://breakintocre.com/courses/ Want instant access to all Break Into CRE courses, models, and additional one-on-one support? Check out Break Into CRE Academy here: https://breakintocre.com/the-academy Research and articles referenced in this video: https://fred.stlouisfed.org/graph/?g=8dGq |
| Category | Education |
| Tags | break into cre | commercial real estate investing | real estate investing | real estate private equity | private equity real estate | npv vs irr | npv real estate | irr real estate | npv commercial real estate | irr commercial real estate | real estate npv discount rate | discount rate npv | how to calculate npv real estate | how to calculate irr real estate | real estate irr calculation | commercial real estate irr calculation | real estate npv calculation | justin kivel | real estate |
