Summary
IRR is the time-weighted return implied by the modelled cashflows, including cash invested, operating cashflow, refinance proceeds and exit value where relevant.
How to apply it when assessing a deal
Use IRR to compare deals where timing matters. A fast refurb and refinance can produce a different IRR from a slow long-term hold even if final wealth looks similar. Always check the cashflow path behind the IRR, because a high IRR can still rely on optimistic exit value or tight finance assumptions.