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Common Return Metrics in a 5-Year Syndication
Syndication returns usually come from cash flow + profit at sale + preferred return (if included).
1. Annual Cash-on-Cash (CoC) Return
- 5–8% per year during the hold
- Some value-add deals may start lower (3–5%) and rise after renovations
2. Internal Rate of Return (IRR)
- 15–20% IRR is often cited as a “good” 5-year value-add multifamily deal
- Core/stabilized deals might be 10-14% IRR
3. Equity Multiple (EM) Over 5 Years
This tells you how much your money grows.
- 1.5× to 2.0× is common
- 1.5× means $100k becomes $150k over 5 years
- 2.0× means $100k becomes $200k over 5 years
- 1.5× means $100k becomes $150k over 5 years
4. Preferred Return (if offered)
- Typically 6–8%, paid before the sponsor takes their share