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Real estate is a complex industry that offers almost anything to anyone. It provides opportunities for those interested in active investing, passive sources of income, and careers as realtors or insurance agents. But many steer clear of it because of two major factors: lack of proper education and inclusivity. Shannon Robnett is on a mission to change this perspective. He inspires people to step up to the challenge in his podcast, Robnett’s Real Estate Run Down.

The show provides something for everyone in the real estate industry. Shannon presents actionable advice on wholesaling, fix and flips, single-family, multi-family, and more. Hear real people talk about all facets of the market, including analysis, challenges, management, and successes of investment-grade. Every conversation provides the foundation for a thriving career.

The podcast is full of useful information for veteran real estate professionals as well as anyone looking to enter into real estate. Learn newfound strategies to improve your tactics, keep up with market trends, and generate fresh ideas for rebranding.

Special guests bring years of experience and vast knowledge about the industry. As they engage in discussions with Shannon, they reveal well-kept secrets for the listeners to dissect and apply. The podcast focuses on every possible asset class, making conversations broad and interesting.

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Episode Blogs

MoneyShow Virtual Expo: The Boise Growth Fund


Did you miss Shannon's MoneyShow Presentation?  Don't worry, we've got you covered!

In case you were not able to make it, below is the recorded version.

Shannon shared insider tools and tactics that have proven themselves to be an effective and profitable year in and year out. He also shares about the solution he is creating to allow investors the opportunity to quickly create passive income regularly without the headache or stress.


Tune in and find out how his solution can work for you.




Equity Multiple VS Internal Rate of Return

 In syndication deals, sponsors have metrics. This confuses the potential investors as it is hard to comprehend what every one of the numbers means and how it identifies with their investment strategy. 


Two often used metrics to measure potential returns are equity multiple (EM) and internal rate of return (IRR).  Investors use IRR to compare several deals and would pick the one with higher IRR.  However, this is not always true.



Equity Multiple


Equity multiple estimates the total returns from an investment. including cash flows from distributions, the initial investment (principle) and also any gains from appreciation of the property.  It is the ratio of this total over the original investment.  However, notice that there is no consideration for the element of time.  So a deal with an equity multiple of two only tells the investor that the sponsors have projected a “doubling” of the investor’s money.  However, over what period of time?



Here’s the formula for calculating an equity multiple:


Equity Multiple = Total Distributions / Total Equity Invested (principle)



Example 1:


An investor invested $1,000,000 in a deal.  The sponsor has distributed annual returns of $200,000 to the investor over a 5 year period.


$200,000 x 5 years + $1 million investment / $1 million total equity invested = 2.0x


In this example, an investor receives an equity multiple of 2.0.  In other words, for every $1 invested in the property the investor gets back $2. (An equity multiple greater than 1.0 means you receive more cash back than invested, while an equity multiple below 1.0 means less money is returned than what was originally invested.)


Example 2:


An investor invested $1,000,000 in a deal.  The sponsor has distributed annual returns of $100,000 to the investor over a 10 year period.


$100,000 x 10 years + $1 million investment / $1 million total equity invested = 2.0x


The equity multiple for both of the above examples is 2x, however as you can clearly see the hold period for example 2 is twice that of example one.   So an investor should not compare two different deals just based on equity multiples as two deals with the same equity multiple can have very different hold periods.  This is where the use of IRR becomes important.


Internal Rate of Return

The IRR calculation considers the time value of money (TVM) while the equity multiple calculation doesn’t. However, equity multiple reports the total cash return of an investment while the internal rate of return measures average cash return over a hold period, taking into consideration that the value of money depreciates over time.



A property with a high IRR may return more money to investors faster, but not necessarily more money overall. Here is an example:



In the above example the initial investment by the investor was $200,000. The total returns are $300,000 (including the initial investment of $200,000). The IRR for this deal is 18% and the equity multiple is 1.5x


Notice that the sponsor returned $100,000 back as distributions in year one which makes the IRR inflated.



In this second example we use the same initial investment of $200,000. However the distribution improves over time.  Notice that because in the IRR calculations the money earned today is weighted more than money earned tomorrow or the day after tomorrow the IRR for this particular deal is 11%.  However, the equity multiple for this deal still remains at 1.5x because the total returns haven’t changed between the two deals. So, IRR can be manipulated by timing the cash flows 


Based on the examples given, investment decisions should be based not only on one metric but all.


Check out our real estate deals to invest on as a passive partner.








Real Estate Development | Multifamily Construction and Syndication

 



In this video, Shannon Robnett talks about his 40 years of experience as a builder, developer, realtor, and multifamily syndicator.

Aaron is a private money lender and real estate agent in Austin, Texas who helps real estate investors, builders, and developers leverage their money to get higher returns on their deals. 

He also help buyers buy homes in the Austin area. He post videos relating to the following topics: 

• Real estate investment 

• New construction • Spec homes 

• Fix/flips 

• Finance 

Connect with Aaron Trevino:

Facebook Group

Instagram

Youtube

Email


Listen

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Our Expanded Social Media Presence
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In addition to a YouTube channel, Shannon Robnett Industries is active on:

Asset 7

 A home base for all things SRI, including an  e-calendar to  book discussions about ground up real estate syndication.
 
Asset 1

A series of videos that frequently include interviews with our favorite financial experts.
Asset 2

Shannon Robnett Industries’ Blog: A broader take on our approach to business. We write about topics like communication in business and how opportunities & partnerships make our investment deals better.
If you have questions about Shannon Robnett Industries that you don’t see on our other pages or would like to make requests regarding our podcast, click here or call 208-291-6312 today. We stay involved online because we are passionate about our business and look for all available outlets to share our ideas and resources. Contact us today if you’d like to be a part of our syndication investments in and around Boise, Idaho.
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