Najafi Capital Video Post
The Hidden Risks Behind a 20% Real Estate IRR
Understand how leverage, timing, exit assumptions and uneven cash flows can make an attractive headline IRR conceal material investment risk.
A 20% real estate IRR can look convincing, but the percentage is only the conclusion. This walkthrough shows how investors test the evidence, cash flows, debt, capital structure and downside assumptions behind it.
Using a fully illustrative €40 million development case, we rebuild the logic behind the projected return and show what changes when several assumptions fail together.
In this video, we examine:
• What exists today and what remains unresolved
• How €24M of debt and €16M of equity reconcile to €40M
• How NOI, yield on cost and the exit cap create implied value
• How LTC, DSCR and refinancing affect equity
• Why IRR is different from equity multiple
• What may sit between property cash flow and investor net economics
• How a correlated downside can erase the base-case cushion
• Seven questions to ask before approaching investors or lenders
CHAPTERS
00:00 The 20% Promise
00:40 What Exists Today?
01:26 Follow the €40M
02:13 Where Value Comes From
02:57 Pressure-Test the NOI
03:42 Can Debt Survive?
04:36 Explain the Return
05:32 From Project to Investor
06:21 Label Every Input
07:07 Attack the Base Case
08:21 Is It Investor-Ready?
SOURCES AND METHODOLOGY
This video uses an illustrative teaching case—not a live offer or investment forecast. The examples include a €40M development cost, €24M construction debt, €16M equity, €3M stabilized NOI, a 6.0% exit cap and a dated illustrative equity cash-flow timeline. Calculations and assumptions are shown separately so the viewer can inspect how each conclusion is produced.
Footage and editorial illustrations provide context only. They do not depict or verify a specific investment opportunity, project, lender commitment, tax treatment or expected return.
IMPORTANT
This content is provided for educational and informational purposes only. It does not constitute investment, legal, tax, lending or financial advice. All figures and scenarios identified as illustrative are not investment forecasts. Nothing in this video is an offer or solicitation to buy or sell an investment.
ABOUT NAJAFI CAPITAL
Najafi Capital helps project sponsors organize the evidence, capital structure and investor-ready project materials needed before approaching lenders or equity investors.
Learn more: https://najafi.capital/
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Educational information: This material is general educational information and does not constitute investment, legal, tax or financial advice.
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