Real Estate Multiples
Hi, I had some questions regarding REPE Multiples if someone can help.. They make sense when I model the CF on excel but not on paper
So if I buy a property 100 and have 60CF and Exit for 100:
Then my RE MoM is 60/100 + 1 = 1.6x right?
and then if I add 50% LTV (no interest)
my MoM would be 60/50 +1 = 2.2x
If someone could confirm this is how you would calculate it on paper, so (CF + Exit - PP / Equity invested) + 1
And maybe explain why in REPE we add +1 to the Equity Multiple ?
Thanks
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