Sample IRR for an Owner Occupied House-- 25% down payment
Your new home costs:				$150,000
Your downpayment must be:				25.00%
Your equity (downpayment) is:				$37,500
Your First Mortgage is:				$112,500
Your interest rate is:				6%
Your amortization period is:				20	years
Your imputed rent is:				$1,200	per month
Your mortgage cost is:				($9,808.26)	per year
Your net imputed rent is:				$4,591.74	per year
The annual inflation rate in housing is:				1.50%
You sell your home after five years for:				$    161,592.60
Principal paid on your mortgage is:
		Year 1		($3,058.26)
		Year 2		($3,241.76)
		Year 3		($3,436.26)
		Year 4		($3,642.44)
		Year 5		($3,860.99)
		Total		($17,239.71)
Principal remaining after five years				$95,260.29
Your cashflow profile is:
		Year 0		-37500	1
		Year 1		$4,591.74	1.2215
		Year 2		$4,591.74	1.492055
		Year 3		$4,591.74	1.82254
		Year 4		$4,591.74	2.226227
		Year 5		$70,924.05	2.719329
		Net cash gain		$      51,791.00
		Total cash returned		$      89,291.00
Your equity IRR is:				22.1%	$0.00	check
One project like this, your cash returned in 5 years is:				$      89,291.00
Leverage implies that with 5% down you get much more cash in five years with five projects than with just one.
The risk of vacancies with five projects is probably lower than with one-- if one tenant moves out, you have a vacancy rate
of 20% in your 5 home portfolio. If you have only one project, your vacancy rate skyrockets to 100%.
However, the risk of a economy wide meltdown, and a default to your bank is probably higher with the 5 unit model.
Project IRR is
		Year 0		-150000
		Year 1		$14,400.00
		Year 2		$14,400.00
		Year 3		$14,400.00
		Year 4		$14,400.00
		Year 5		$    175,992.60
		Net cash gain		$      83,592.60
		Total cash returned		$    233,592.60
Your project IRR is:				10.8%
The IRR on the project is made up of the 'weighted average' IRR on your equity (22%) plus the IRR
on your debt (6%).