What do I input into IRR?

IRR is Internal Rate of Return, one of the most important financial measures

This value will be listed on the main page for your investment, and it is a key indicator to addy members to determine how much they want to invest in your issuance. It will also be used in the returns calculator tool that is available to addy members. Please input a positive value to two decimal places.

The IRR is calculated through Microsoft Excel using the =IRR() (if yearly period) or =XIRR (if monthly) or other real estate software.

Excel - IRR

Formula:

• values: This is a range of cells that contains the series of cash flows (including the initial investment, which should be negative).
• guess (optional): An estimate of what you think the IRR will be. If omitted, Excel uses 10% as the default guess.

Example:
If you have an initial investment of $100,000 (cell A1), followed by returns of $20,000 in year 1 (cell A2), $30,000 in year 2 (cell A3), $40,000 in year 3 (cell A4), and $50,000 in year 4 (cell A5), the IRR formula would be:

The IRR formula would be:

Excel - XIRR

Formula:

=IRR(values, dates, [guess])

Parameters:

• values: A range of cells containing the series of cash flows (including the initial investment, which should be negative).
• dates: A range of cells containing the corresponding dates for each cash flow.
• guess (optional): An estimate of what you think the IRR will be. If omitted, Excel uses 10% as the default guess.

Example:

Suppose you have the following data:

• Initial Investment: -$100,000 on January 1, 2023 (in cell A1 with date in cell B1)
• First Return: $20,000 on April 1, 2023 (in cell A2 with date in cell B2)
• Second Return: $30,000 on October 1, 2023 (in cell A3 with date in cell B3)
• Third Return: $50,000 on January 1, 2024 (in cell A4 with date in cell B4)

The XIRR formula would be: