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Part 3 of "The Alphabet Soup of Real Estate Investing:” FMRR & MIRR

By
Services for Real Estate Pros with RealData, Inc.

In Part 2 of this series of articles we had just reached what appeared to be an epiphany of sorts. We turned Discounted Cash Flow on its head, solving for the rate rather than the Present Value. That rate – the Internal Rate of Return – looked like it provided a good measure of investment return and an excellent way to compare alternative investments because it was sensitive to the interplay between the timing and the magnitude of our investment’s cash flows.

That’s when I issued a “Not so fast” admonition, with the unabashed purpose of luring you back for the next part of this discourse.  All right – what are the problems with IRR and how do we deal with them? Let’s look at FMRR and MIRR in Part 3 of our series, "Stirring the Alphabet Soup of Real Estate Investing."

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