On this page, you will input key details regarding your exit strategy. These inputs are crucial for calculating IRR (Internal Rate of Return) and understanding the long-term profitability of your project. Even if you plan to hold the property, defining an exit year provides valuable insight into the project’s financial outcomes.
Key Fields:
Holding Period: Input the number of years you plan to hold the property. This is typically set to 10 years in real estate underwriting but can be adjusted to match your investment timeline.
Cap Rate – Exit Year: Specify the expected capitalization rate at the time of exit. This figure helps estimate the property's resale value at the end of the holding period.
Closing Costs: Enter the percentage of closing costs at the time of sale. These include legal fees, agent commissions, and other expenses associated with the sale of the property.
Acquisition Cap Rate:
Located on the right side, this is the initial cap rate at acquisition, which provides a baseline for comparing the entry and exit cap rates to gauge investment performance. You can edit this cap rate amount in the Acquisitions page of the input menu on the left side of the app.
By filling in these fields, you can ensure that Cactus calculates an accurate IRR and provides clear insights into your exit strategy. Use the info icons for additional clarification on each input. After completing this section, you’ll have a full picture of the potential returns from your project.