Realistic IRR

[Gaurav Bahal]

Hi BP'ers,

As I am digging more into analyzing REIs I am realizing that ROI is not a good metric compared to IRR because ROI does not factor the time value of money. This becomes especially important when I am holding a property for a long time and hoping for the appreciation and equity to be a large component of return.

My question is:

1. What is a realistic after tax IRR for a class B property with ~10% year one Cash on Cash return and 4% average annual appreciation? I am assuming 30 year time period and am getting 12% after tax IRR. The same property gives me a average 40% ROI for 30 year hold.

2. Does anyone have a spreadsheet to plug in assumptions and get the basic ratios and metrics including IRR for a REI?

Thanks,

Gaurav