Valuation

[Justin Spaulding]

Hey guys,

Question for ya'll to stab at.

I bought a four unit in 2013 for $210,000 ($10,000 sat in escrow for repairs) and the rents were at $500. We did the repiars and now the 4 rents are up to $640. (Leases are up in a few months and rents will be raised).

I bought my second four unit (right next door to the first) in 2014 for $190,000. The rents were $420 per month and one united needed complete remodel. We have since raised the rents in this building to $650, $775, $725, and $725. 

We obviously are cash flowing like crazy and have some hidden value in these properties. The appraisals have been messed up. They only go off previous purchases which we are the only people purchasing so they value off our previous purchase price even though we have turned them around.

I know there are numerous ways to value this cash flow and these properties. We use the gross monthly rents multiplied by 100 as one way to value but then we also have a financier who is involved in both buildings who adds up YEARLY rents and gives it a Gross Rent Multiplier of 9.2.

Just curious as to how you guys who are in the same boat as me put a dollar value on these.

Thanks!

Justin

(P.S. I just joined Bigger Pockets, and this thing is awesome!)