IRR (Internal Rate of Return)
The annualized rate of return on an investment over a holding period, accounting for cash flows and appreciation. More comprehensive than cap rate or cash-on-cash for long-term hold modeling.
Why it matters on a DSCR loan
IRR matters most when comparing deals with different hold periods and financing structures — for example, whether an interest-only DSCR loan's higher early cash flow beats a fully amortizing loan's equity build over a ten-year hold. It rewards getting money back early, which is why BRRRR investors who recover capital through a cash-out refinance often show strong IRRs even on modest properties. The common trap is trusting an IRR built on aggressive exit-price assumptions; stress-test the terminal value before believing the number.
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DSCR Calculator Get a QuoteReviewed by Arin Baghermian, Broker Owner — NMLS #1220456 · Last reviewed July 2, 2026 · DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548).