Assuming we all match funds on the all cash purchase and related costs and the contractor will be doing the rehab/remodeling should he be allowed to add in a profit multiplier for his work?

Now if the numbers multiply, 3-6 at any given time, maybe some average rehabber will consider it.

GRM method looks at the gross revenue and multiplies it by an appropriate coefficient, called multiplier.

It seems ridiculous.My expenses usually look like this:Taxes - tax appraiser calc at sale priceInsurance - guestimation of my house and fiance's condoMortgage (+mip) - 1.15% (of purchase price - down payment)/12Rental Eff - 11/12 * monthly incomeHOA - Utilities - (check for seperate meters in listing or not ~150-200 per unit)Lawn - 100-150ishCapX - roof sq ft times $6.00 (difficulty multiplier) / 30 years / 12 month ; # water heaters ; # HVAC ; # wall shakers ; Septic Tank pump out per 10 yearProperty management - 1/12 of monthly incomeOther - usually left blankMy Income is usually whats listed.

I tend to use a gross rent multiplier instead of cap rate since the math is easier, a 50 GRM is the same as the 2% rule.

No, but I can do my little part to affect change & profit while doing it.I also like the idea that I can make the cash flow multiply in short order by reinvesting in additional lower cost properties.

As your profit grows from repeated use, you can multiply the number of rehabbers you can partner with.

This indicates that a balance has been struck between the jobs that create other jobs through a multiplier effect and jobs that do not or if they do the multiple is low and indicates a stable economy and hence a stable housing area.Doctors, Engineers, Business owners, etc. have multiples of anywhere from 5-20 on a first level tier.

Hi All,just got put onto this site by an investing colleague of mine - what a phenomenal resource.I am looking at a 4-plex, it'll be my second rental purchase, already have one established, albeit SFR.When I look at comps the nearest 4 plex units are all 2 bed 1 bath, and one sold as recently as Dec 2014, so is a good guide for me.What is a good strategy to estimate value in the 4 plex of interest to me which is 3/2 as it's the only 3/2 layout compared to the other 2/1's.I have averaged number of rooms and applied this to larger 4 plex, eg sold for value divided by 8 (2bedx4 units), divided by 12 (2 bed, 1 bathx4) , then multiplied this by 12 (3bedx4) and 20(3bed, 2 bathx4) and I have also used square footage ratio's to gain a value on the larger property.Are any of these methods feasible and if there's a better method, I'd love to hear it.For the record, these comparative units are all in the same subdivision, are architecturally similar, so direct comparisons in this case are pretty close.Thanks in advance,Michael.

But I do have a question, would  would it be typical to add back the owner salary to the net annual income and then multiply that by 1.5 to 2.5?