All Forum Posts by: Craig Anderson

Hey Craig, the gross rent multiplier is the purchase price of a property divided by its gross annual rent. You can verify this on the Wikipedia page for gross rent multiplier. This is what Joe Gummerson posted with the equation arranged differently. It is also called the price to rent ratio. 

I got 30 from this website https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities. It is higher than Zillow's figures:  https://www.zillow.com/san-diego-ca/home-values/. The average price and median rent are provided there to calculate the GRM.

Hey @Dominique Le, welcome to BP. I'll give my $0.02. 

I'm just going to respond to your ideas. Yes, house hacking will mitigate your mortgage payment though it probably won't take it to a net $0. Just make sure that when you do move out the multi will cash flow at that time. The rental property calculator on BP should tell you whether that will be the case.

For the fixer upper, gauge the after repair value (ARV) conservatively and then run the rental or flip numbers based on that. Again, make sure it will cash flow when moving out (rental) or provide enough profit (flip).

I like your idea of investing out of state the most. I don't know what the flip market is like in San Diego. I calculated the gross rent multiplier in SD to be above 30 which means cash flowing rentals will be hard to find. Buying low somewhere else is probably a good use of your money but daunting if it's your first real estate investing deal. I heartily recommend David Greene's books that you mentioned. Excellent if you're interested in either method. 

Good luck!

So my wife and I are as green as it gets when it comes to real estate investing. We're ready to jump in with both feet and are trying to be as wise as we can in the process. I've been spending hours on this website every day and have been reading a bunch of books. We really want to purchase a multifamily home in Tacoma, Wa and live in one of the units. I've been reading about 203(k)loans and am not afraid of a fixer upper. Is there a better way or better loan I should be thinking about? Would you, or would you not recommend a multifamily as a first endeavor? Thanks for all your help in advance!

@Craig Anderson

BP is full of great content, so I strongly recommend you to have a look at the following resources:

1. Start by reading the Ultimate Real Estate Investing Guide: https://www.biggerpockets.com/guides/ultimate-real-estate-investing-guide/introduction

2. Then check out other online guides available here: https://www.biggerpockets.com/guides

3. Have a look at BP's blog where new articles are published every day: https://www.biggerpockets.com/blog

4. If you wish to network or ask specific questions about your local market, you can go to your local real estate forum and discuss with investors from your area: https://www.biggerpockets.com/forums/86-local-real-estate-networking

5. Or you can directly meet them by registering to real estate events around you: https://www.biggerpockets.com/forums/521-events-and-happenings

6. BP has various tools available to help you analyze your deals (rental, flips, wholesale, etc), feel free to use them: https://www.biggerpockets.com/investment-calculators

7. Finally, if you can't find what you're looking for, try the Bigger Pockets Fileplace: https://www.biggerpockets.com/files It contains hundreds of files such as ebooks, checklists and spreadsheets for real estate investors. I've myself uploaded a rental property spreadsheet to help beginners analyze their first investment properties, it's available in my fileplace: https://www.biggerpockets.com/files/user/NickPeters

Please let me know if I can help, and best of luck!

@Craig Anderson Brandon Turner has done webinars in it you can just YouTube it and find many videos on the subject. You can become a pro member and use their calculators as many times as you want or you can build an excel sheet to do the same thing. I went pro bc the calculators are so clean and simple and the PDF afterward is very nice. Best of luck to ya

@Michael A DeAngelo is right.  Brandon Turner has the best YouTube video's I've come across for running the numbers.  The calculators are also a nice perk when you upgrade to Pro as the pdf's make for a clean presentation when speaking with investor's.  Search "Brandon Turner How to Analyze a Deal" and all of the top results are awesome.

@Michael A DeAngelo is right.  Brandon Turner has the best YouTube video's I've come across for running the numbers.  The calculators are also a nice perk when you upgrade to Pro as the pdf's make for a clean presentation when speaking with investor's.  Search "Brandon Turner How to Analyze a Deal" and all of the top results are awesome.