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Updated about 9 years ago on . Most recent reply

User Stats

3
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1
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Luan Nguyen
  • Ho Chi Minh, Ho Chi Minh
1
Votes |
3
Posts

How to calculate IRR for a condominium project?

Luan Nguyen
  • Ho Chi Minh, Ho Chi Minh
Posted

I have a project to build a condominium: three buildings in three years (each building A, B, C for each year 1, 2, 3). I have projected revenue, gross profit and net profit for building A in year 1, building B in year 2 and bulding C in year 3. How do I calculate the IRR for the whole project A, B, C?

Please note cost of sales for each building is equal to the development cost of each building (gross profit = revenue - cost of sales)

So when I put the data in Excel, to calculate IRR, the development cost should be the first number (negative), then in the next cell, the cash flow should be net profit + development cost (since net profit is the result of revenue minus cost of sales, if we do not add back development cost (equal to cost of sales) to the cash flow, we would calculate it twice - one from the first negative number and one from the result of net income from revenue). Is that IRR calculation correct?

Does BiggerPockets have a calculator to calculate this kind of project? 

Thank you. 

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