EquityMultiple Review 2021

 Final results on EquityMultiple - First test investment

Interim results were posted here. Since then, this investment has run full cycle and paid out. The following is my analysis of the investment performance. I use XIRR to measure and compare against other non-real estate investments. I find the XIRR number useful when an investment is longer than 12 months. 

On the surface it appears that the investment returned 16% on the initial capital (not shown below - use example of 100 invested returned 116), however that was over a 26 month period and there were fluctuations over the months for the reasons mentioned in the earlier post. The simple calculation is dividends/capital invested * 100 = ~16%.

However, this is not the complete picture as the results were over a period of 26 months. While the monthly returns look great in isolation, the XIRR and even a simple Compound Annual Growth Rate (CAGR) over the period is less impressive, when compared to the original projected returns(~10%). 

My lessons learnt

- The added tax filing requirements of an investment in a different state, for my small investment amount are not worth the hassle.

- The investment returns are not predictable to depend on as passive income. This is not a CD :)

- Beware of the numbers and projections. EquityMultiple will most likely present this investment as having a 1.16 multiple. Which is true it has returned 16% on the original investment. However, the returns were over a period of 26 months.