NPV puts time back into the deal

The move: compare cash by timing, not just by total. NPV is useful in real estate because the money does not arrive all at once. Your equity leaves immediately. Repairs may hit before the first rent check. Rent growth, refinance proceeds, and sale proceeds arrive later, if the assumptions hold. Discounted cash flow brings those later dollars back to present value so you can compare them with the cash you invest today. The model has three practical benefits. First, it makes your required return explicit. Second, it shows which deals rely on distant payoff rather than durable operations. Third, it…

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