Instead they'll apply a NADA value or try to use a gross rent multiplier to that income stream.Let's say that there are 10 TOHs and 1 POH.Lot Rent: $400POH Rent (above the lot rent): $200Let's look at the different valuation theories:Example A: Split the Lot Rents from the POH Rents$400 x 11 x 12 = $52,800Exp factor: 30%NOI: $36,960Cap Rate: 10%Valuation: $369,600 - for the LandExample B: Remove any income generated by POHs$400 x 10 x 12 = $48,000Exp factor: 30%NOI: $33,600Cap Rate: 10%Valuation: $336,000 - for the LandYou can see a $30,000 swing in valuation.Example C - Cap all the income$600 x 11 x 12 = $79,200Exp Factor: 30%NOI: $55,440Cap Rate: 10%Valuation: $554,400As you can see, how you cap the income streams can greatly affect value.Banks will value based on A or B, but not C.

@Ryan SweeneyI am surprised your income taxes will give you that much of a hit.It seems like he took the 14% and multiplied it by your federal/state marginal tax rate and told you 9%.Did he factor in that you would have depreciation which would reduce the taxable portion of the cash flow?

First for saving up that cash and now looking to multiply it.

Then you multiply it by 100.I have always been a buy and hold fan, so I am biased toward that.

For my own valuation, what multiplier of annual profit (before rent is taken out) is a good target range?

Calculations: Based on the available data, the tool should instantly calculate metrics such as the following: $/SqFt, $/Bedroom, Average Price in Zip Code, Price as % of Zip Code, Gross Rent Expected, Gross Income Multiplier, etc.4.

In either case I'd strongly consider exchanging, as I like the idea of "swap till you drop" and the multiplier effect it can have, especially generationally. 

My suggestions are based off FIRST multiplying your capital a bit more, so that when you do your own projects, you have more capital and experience to set yourself up for success.

I took the annual gross multiplied it by 12% to consider vacancy.

I'm starting to see flips sit on market with multiply price drops because they shot for the moon in bad locations.