Understanding IRR, Equity Multiples, and Real Return Drivers —
Using a Real-World Style Example From a 300-Unit NYC Deal

When evaluating private real estate offerings, experienced investors know that numbers alone don’t create great investments — context, assumptions, and execution do.

At Zenya Capital, we always emphasize one foundational principle:
It’s not the deal itself that generates returns, but the strategy, the timing, and the operator’s discipline.

This is the level of clarity, structure, and execution we bring to every offering.
Before we begin, did you know you can invest WITH YOUR SELF-DIRECTED IRA OR 401K?

Please download my free PDF on How To Convert Your 401 (k) / IRA To Invest In Real Estate Without Penalty… by clicking here: https://zenyacapital.com/401k-ira-pdf/

Okay, let’s begin:
To illustrate how sophisticated investors should interpret IRR, equity multiple, and overall deal structure, let’s walk through a fictitious, NYC-based, institution-grade multifamily acquisition and break down exactly how value is created.

Case Study: The Astoria View Residences

300-Unit Class B+ Multifamily | Queens, New York

Acquisition Year: 2026
Disposition Year (Projected): 2033
Hold Period: 7 years
Property Type: Mid-rise, elevator multifamily with value-add upside
Market: Astoria, Queens — supply-constrained, high-demand rental corridor
Purchase Price: $148,000,000
Renovation Budget: $18,500,000
Total Project Cost: $166,500,000

Capital Stack

Senior Debt:

62% LTC (Loan-to-Cost)
Loan Amount: $103,200,000
Fixed Interest: 5.35%
Interest-Only Period: 3 years

Equity:

Total Equity Raised: $63,300,000
LP Share: 85%
GP Share: 15%

Preferred Return to LPs: 7%

This capital structure balances debt efficiency with risk mitigation — a common approach for NYC value-add plays.

Value-Add Strategy (7-Year Plan)

Zenya Capital’s simulated plan for Astoria View:

Year 1–2: Renovations & Repositioning

Renovate 210 units (premium finishes)
Add co-working lounge + rooftop fitness deck
Upgrade elevators and mechanical systems
Rebrand the property and overhaul digital leasing strategy

Year 2–4: Revenue Optimization

Grow average rents by 18–22% on renovated units
Improve NOI by reducing energy waste and negotiating new service contracts
Reduce economic vacancy through automated leasing funnels

Year 5–7: Stabilization & Sale Prep

Stabilize at target NOI
Explore refinancing or listing for disposition depending on interest-rate environment

Projected Investor Returns

Cash Flow (Average Annual to LPs): 6.8%

Total LP IRR: 14.7%

Equity Multiple: 2.24x

Meaning:
For every $1.00 invested, the projected return is $2.24 over the 7-year lifecycle.

Where the Returns Come From

Here’s how value is created:

1. Net Operating Income (NOI) Growth

Pre-renovation NOI: $7.9M
Stabilized NOI (Year 5 onward): $12.4M

This 56% NOI lift is what drives valuation.

2. Sale Value (Year 7)

Using a conservative 5.00% exit cap rate:

$Sale\ Price = \frac{NOI}{Cap\ Rate} = \frac{12.4M}{0.05} = 248M$

$S a l e P r i ce = \frac{NO I}{C a p R a t e} = \frac{12.4 M}{0.05} = 248 M$

Projected sale price: $248,000,000

After loan payoff and transaction costs, LPs receive an estimated $118,000,000, producing the 2.24x multiple.

3. Example Investor Check Breakdown

If an investor puts in $250,000:

Annual cash flow: ~$17,000 average
Total preferred return over 7 years: $122,500
Final profit at sale: $438,500

Total Projected Return:

$$250,000 → $561,000\ (net\ profit)$

This level of return places the offering in the upper-middle performance band for institutional-quality New York multifamily.

How Experienced Investors Should Interpret These Returns

IRR (Internal Rate of Return)

IRR captures time-adjusted performance.
A 14.7% IRR over 7 years indicates:

Strong but not overly aggressive assumptions
Quality market fundamentals
Healthy cash flow + significant backend appreciation

For NYC, anything above 13% IRR in stabilized multifamily is considered strong.

Equity Multiple

A 2.24x EM means the investment more than doubled.

This metric tells you how profitable the deal is without factoring time.
It shows the actual wealth creation.

Risk Profile

This deal falls into the “Value-Add, Moderate Risk” category:

Risks:

Renovation execution
Interest rate environment
NYC regulatory complexity

Strengths:

Supply-constrained submarket
Deep rental demand
High upside on upgraded units
Strong exit liquidity in NYC

Experienced investors will recognize this as a balanced risk-adjusted play.

Why Deals Like Astoria View Appeal to Institutional and Ultra-Sophisticated Investors

Hard assets in supply-constrained corridors rarely underperform
Value-add gives forced appreciation, not just market appreciation
NYC liquidity remains among the strongest in the world
Long-term rental demand is exceptionally stable
Professional operators de-risk execution through disciplined processes

Final Takeaway for Investors

Great returns are never an accident.
They come from:

✔ A defined thesis
✔ A disciplined operator
✔ Market constraints that amplify NOI growth
✔ A capital stack aligned with risk and reward
✔ Long-term, fundamentals-based strategy

The Astoria View case study illustrates exactly how a well-structured deal can produce attractive, risk-adjusted returns — even in competitive markets like New York City.

MATH EQUATIONS FOR EACH SECTION

Below are the formulas for:

NOI Growth
Valuation (Cap Rate Formula)
Equity Multiple
IRR (Formula + Intuition)
Investor Profit Breakdown
Cash-on-Cash Return
Debt Service Coverage
Loan Amount Calculation
Value-Add Cost per Unit
Exit Proceeds to LPs

NOI Growth Equation

Initial NOI → Stabilized NOI

$NOI = Income – Operating\ Expenses$

$NO I = I n co m e - Op er a t in g E x p e n ses$

If original NOI = $7.9M

Stabilized NOI = $12.4M

NOI Growth %

$NOI\ Growth\% = \frac{12.4M – 7.9M}{7.9M} \times 100$

$NO I G ro wt h % = \frac{12.4 M - 7.9 M}{7.9 M} \times 100$

$NOI\ Growth\% = \frac{4.5M}{7.9M} \times 100 = 56.9\%$

$NO I G ro wt h % = \frac{4.5 M}{7.9 M} \times 100 = 56.9%$

Valuation Formula (Cap Rate Method)

$Value = \frac{NOI}{Cap\ Rate}$

$Va l u e = \frac{NO I}{C a p R a t e}$

Stabilized NOI = $12.4M
Exit cap rate = 5.00% (0.05)

$Value = \frac{12.4M}{0.05} = 248M$

$Va l u e = \frac{12.4 M}{0.05} = 248 M$

Equity Multiple

$Equity\ Multiple = \frac{Total\ Cash\ Returned}{Total\ Equity\ Invested}$

$Eq u i t y M u lt i pl e = \frac{T o t a l C a s h R e t u r n e d}{T o t a l Eq u i t y I n v es t e d}$

If LPs invested $63.3M
Total cash returned at exit = $141.7M (example)

$Equity\ Multiple = \frac{141.7M}{63.3M} = 2.24x$

$Eq u i t y M u lt i pl e = \frac{141.7 M}{63.3 M} = 2.24 x$

Interpretation:
Every $1.00 invested becomes $2.24.

IRR (Internal Rate of Return)

IRR is the discount rate that makes NPV = 0.

IRR Equation:

$NPV = \sum_{t=1}^{n} \frac{CF_t}{(1+IRR)^t} – Initial\ Investment = 0$

$NP V = t = 1 \sum n \frac{C F ^{t}}{( 1 + I RR ) ^{t}} - I ni t ia l I n v es t m e n t = 0$

Where:

$CF_t$

$C F_{t}$ = cash flow in year t
n = number of years (7 in our case)

Example simplified inputs:

Year 1–7 average cash flow = $4.3M
Sale year LP proceeds = $118M
Initial LP investment = $63.3M

You plug these into the IRR formula or calculate via Excel:

$=IRR(\{-63.3M, 4.3M, 4.3M, 4.3M, 4.3M, 4.3M, 122.3M\})$

$= I RR ({- 63.3 M, 4.3 M, 4.3 M, 4.3 M, 4.3 M, 4.3 M, 122.3 M})$

Result: 14.7% IRR

Investor Profit Breakdown

If an LP invests $250,000:

Total Return:

$Total\ Return = 250,000 \times 2.24 = 560,000$

$T o t a l R e t u r n = 250, 000 \times 2.24 = 560, 000$

Profit:

$Profit = 560,000 – 250,000 = 310,000$

$P ro f i t = 560, 000 - 250, 000 = 310, 000$

Average Annual Cash Flow:

Assume 6.8% CoC on $250,000:

$Annual\ Cash\ Flow = 250,000 \times 0.068 = 17,000$

$A nn u a l C a s h Fl o w = 250, 000 \times 0.068 = 17, 000$

Cash-on-Cash Return (CoC)

$CoC = \frac{Annual\ Cash\ Flow}{Equity\ Invested}$

$C o C = \frac{A nn u a l C a s h Fl o w}{Eq u i t y I n v es t e d}$

$CoC = \frac{17,000}{250,000} = 6.8\%$

$C o C = \frac{17 , 000}{250 , 000} = 6.8%$

Debt Service Coverage Ratio (DSCR)

$DSCR = \frac{NOI}{Annual\ Debt\ Service}$

$D SCR = \frac{NO I}{A nn u a l De b t S er v i ce}$

If stabilized NOI = $12.4M
Annual debt service = $7.8M

$DSCR = \frac{12.4M}{7.8M} = 1.59$

$D SCR = \frac{12.4 M}{7.8 M} = 1.59$

A DSCR above 1.25 is typically financeable.

Loan Amount Calculation

Loan-to-Cost = 62%

$Loan\ Amount = Total\ Cost \times LTC$

$L o an A m o u n t = T o t a l C os t \times L TC$

$Loan\ Amount = 166.5M \times 0.62 = 103.23M$

$L o an A m o u n t = 166.5 M \times 0.62 = 103.23 M$

(rounded to $103.2M)

Value-Add Cost Per Unit

Renovation budget = $18.5M
Units renovated = 210

$Cost\ Per\ Unit = \frac{18.5M}{210} = 88,095$

$C os t P er U ni t = \frac{18.5 M}{210} = 88, 095$

LP Exit Proceeds Calculation

Step 1 — Gross Sale Price:

$248M$

$248 M$

Step 2 — Subtract Closing Costs

Assume 1.5% costs = $3.72M

$Net = 248M – 3.72M = 244.28M$

$N e t = 248 M - 3.72 M = 244.28 M$

Step 3 — Subtract Remaining Loan Balance

Loan payoff = $103.2M

$Net\ Proceeds = 244.28M – 103.2M = 141.08M$

$N e t P rocee d s = 244.28 M - 103.2 M = 141.08 M$

Step 4 — Allocate to LPs (85% share):

$LP\ Proceeds = 141.08M \times 0.85 = 119.9M$

$L P P rocee d s = 141.08 M \times 0.85 = 119.9 M$

Rounded in case study to $118M for conservatism.
The end

At Zenya Capital, this is the level of clarity, structure, and execution we bring to every offering.

And did you know you can invest WITH YOUR SELF-DIRECTED IRA OR 401K? Please download my free PDF on How To Convert Your 401 (k) / IRA To Invest In Real Estate Without Penalty… by clicking here: https://zenyacapital.com/401k-ira-pdf/

Peace, Bobby Zapp of Zenya Capital

Investing involves risk, including loss of principal. Past performance does not guarantee or indicate future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of data provided by investors or other third parties.

Neither Zenya Capital Investments nor any of its affiliates provide tax advice and do not represent in any manner that the outcomes described herein will result in any particular tax consequence. Offers to sell, or solicitations of offers to buy, any security can only be made through official offering documents that contain important information about investment objectives, risks, fees and expenses. Prospective investors should consult with a tax or legal adviser before making any investment decision.

Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

Understanding IRR Equity Multiples and Real Return Drivers, Using a Real-World Style Example From a 300-Unit NYC Deal

Understanding IRR, Equity Multiples, and Real Return Drivers —Using a Real-World Style Example From a 300-Unit NYC Deal

Case Study: The Astoria View Residences

300-Unit Class B+ Multifamily | Queens, New York

Capital Stack

Value-Add Strategy (7-Year Plan)

Year 1–2: Renovations & Repositioning

Year 2–4: Revenue Optimization

Year 5–7: Stabilization & Sale Prep

Projected Investor Returns

Cash Flow (Average Annual to LPs): 6.8%

Total LP IRR: 14.7%

Equity Multiple: 2.24x

Where the Returns Come From

1. Net Operating Income (NOI) Growth

2. Sale Value (Year 7)

3. Example Investor Check Breakdown

Total Projected Return:

How Experienced Investors Should Interpret These Returns

IRR (Internal Rate of Return)

Equity Multiple

Risk Profile

Why Deals Like Astoria View Appeal to Institutional and Ultra-Sophisticated Investors

Final Takeaway for Investors

MATH EQUATIONS FOR EACH SECTION

NOI Growth Equation

Initial NOI → Stabilized NOI

NOI Growth %

Valuation Formula (Cap Rate Method)

Equity Multiple

IRR (Internal Rate of Return)

IRR Equation:

Investor Profit Breakdown

Total Return:

Profit:

Average Annual Cash Flow:

Cash-on-Cash Return (CoC)

Debt Service Coverage Ratio (DSCR)

Loan Amount Calculation

Value-Add Cost Per Unit

LP Exit Proceeds Calculation

Step 1 — Gross Sale Price:

Step 2 — Subtract Closing Costs

Step 3 — Subtract Remaining Loan Balance

Step 4 — Allocate to LPs (85% share):

Bobby Zapp, Founder and CEO of Zenya Capital, a private investment firm designed with one mission: to give accredited investors access to institutional-grade real estate deals through the power of Fund of Funds and syndication investing.

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Understanding IRR, Equity Multiples, and Real Return Drivers —
Using a Real-World Style Example From a 300-Unit NYC Deal

Bobby Zapp, Founder and CEO of Zenya Capital,
a private investment firm designed with one mission: to give accredited investors access to institutional-grade real estate deals through the power of Fund of Funds and syndication investing.