The bottom line is this: do not choose one investment over another simply because it advertises a higher rate of return.
I’ve been guilty of precisely this mistake on many occasions, and suffice it to say, it’s gotten me into trouble.
In this podcast, I will define the two main types of returns you’ll usually see advertised in real estate deals: Internal Rate of Return (IRR) and Equity Multiple (EM). Both these metrics are important to use when determining if you should invest and how they match your personal goal. I will also discuss the risk and the assumptions of manipulation.
The Passive Income MD Podcast