Short Term Rental Portfolio Valuation Question

[Sean Baker]

Good afternoon:

I'm working with a group of investors to create a short-term rental portfolio. Our strategy is to create the portfolio, get it cash-flowing and then potentially divest as a portfolio. My question is how to think about future value. I have experience with private equity and commercial M&A where we use an EBIDTA multiplier to value an acquisition. Is anyone using a similar valuation model for real estate portfolios that are cash-flowing or are all of these straight real estate transactions based upon residential valuation methodologies? Example: I'd love to use annual cashflow or EBIDTA equivalent and a multiplier on that to increase the portfolio value above residential market value. Am I crazy?