Hold Period IRR Vs Cash On Cash Calculator

IRR and CoC differ. This calculator reconciles.

Initial equity

Average annual cash flow

Sale proceeds (equity back)

Hold years

IRR %

17.38%

Cash-on-cash %

7.00%

Equity multiple

2.08

How the math works

CoC = annual CF / equity. IRR = discount rate that zeros NPV across full cash flow incl sale.

On $3M equity, $210k/yr, $5.2M sale proceeds over 5 years: 7% CoC but 18.4% IRR with 2.08x equity multiple. Value creation at sale drives IRR well above yield-only CoC. Typical value-add deal profile.

How to Use

Enter initial equity.
Enter average annual cash flow.
Enter sale proceeds (equity back).
Enter hold years.
Read IRR and CoC.

Frequently Asked Questions

Difference?

CoC: annual cash flow / equity invested. Doesn't include sale. IRR: full cash flow pattern including sale. CoC easy; IRR time-weighted. 10% CoC vs 15% IRR common — IRR captures value creation at sale plus cash flow.

Which matters?

Investors care about IRR (wealth creation). CoC shows dividend (yield). Both relevant: high CoC / low IRR = yield play, no growth. Low CoC / high IRR = growth play, pay-off at sale. Institutional investors optimize IRR; yield-focused LPs emphasize CoC.

Hurdle rates?

Core (stabilized): 7-10% IRR, 6-8% CoC. Value-add: 13-17% IRR, 7-10% CoC stabilized. Development: 18-25% IRR, 0-5% early CoC. Opportunistic: 20%+ IRR with low initial CoC. Match strategy to investor appetite.