Property returns
Unlevered and levered IRR, multiple, cash-on-cash, exit cap sensitivity.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: property returns.Updated 30 September 2026
What it does
The hold as two cash flow series. Unlevered: the purchase and closing costs out, cash flow before debt service in, and the net sale proceeds at the end, priced on forward NOI at the exit cap rate. Levered: the same with the loan in at closing and debt service and the balloon out. IRR and multiple on each, cash-on-cash by year, and a sensitivity that re-prices the sale at five exit cap rates in live formulas.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 6–7: Year, Hold period (years)
- Assumptions, rows 30–31: Exit cap rate on forward NOI, Selling costs, % of sale price
- Returns, rows 6–9: Forward NOI at sale (Year 11), Sale price = forward NOI over the exit cap rate, Net of selling costs, Going-in cap rate: Year 1 NOI over price
- Returns, rows 12–17: Purchase and closing costs, Cash flow before debt service, Net sale proceeds, Unlevered cash flow…
- Returns, rows 20–26: Loan drawn, net of fee, Debt service and balloon, Levered cash flow, Equity invested…
- Returns, rows 29–37: Step, Exit cap rate, Levered cash flow at cap -2 step, Levered cash flow at cap -1 step…
What a reviewer looks for
- Selling on trailing NOI.
- An IRR quoted without the exit cap it depends on.
- Cash-on-cash computed on price rather than on equity.
Learn it, then build it
Build · Lab · ~3 min
IRR by Eye
Say the IRR for any multiple and hold before the interviewer finishes the sentence, and the multiple for any IRR.
Read · Guide · 13 min
Real Estate Financial Modelling: Why Corporate Finance Mechanics Break Here
Vocabulary: Cash-on-Cash Return, Equity Multiple, IRR.