Figuring out max purchase price from mo rents.

[Terry Royce]

I am looking at a 3 unit with mo gross rents of 1100. The price is too high, but how do I figure out what my max offer is based on the rents?

i know ive seen a "rule of thumb formula" bounced around here somewhere.

thanks

[Jon Holdman]

OK, I've uploaded a more complex analysis sheet to google docs:

Hard money then refi evaluator

In order to see the forumlas you will need to create a google docs account. Then, open this document. Do a "File -> Create a Copy" to make a copy into your own account. Now, you should be able to double click any of the cells in the outputs area and see the formula.

No guarantees at all. Its completely wrong and produces bogus results. If you lose a ton of money its not my fault.