I am confused on what number I am multiplying the 65% or 70% to.

I understand that's a wide range, especially when you multiply by 4.

There is a pretty popular podcaster who also has a free ebook and does webinars, etc (and who I'm not referring to by name on purpose, since he doesn't pay me to advertise for him) who once said on his podcast to figure rehab costs by multiplying ft^2 by $10.00.

I write the whole process in an earlier post in this thread, when I initially had a contract, it had no mold, and when they had to re-foreclose due to their closing attorney waiting till the last minute to correct a technical error, then didn't pay the electric bill for six months while they wait for the process to get sorted out, no air conditioning indirectly caused the mold to multiply.

All links are from here: http://www.biggerpockets.com/articles/category/property-analysisCap rateUnderstanding Cap Rates (Capitalization Rates)Sq/Ft compareables, price comparablesEstimating Price Without Comparable CompsGRMGross Rent Multiplier - I read about this hereFor my current abode:Duplex, Purchase price of $260k, half rents for $1000/month130k acquisition (half of the property) 12k annual rent = 10.83 GRM for meThis property is my home and this is just an offset.

Multiply that times 70% and you get $42,000.

Not that I don't love the humor and want to change the subject, but could he possibly be referring to the GRM or Gross Rent Multiplier rule of 8 or less.

A rough guide to translating Nickerson's numbers is to multiply his dollar amounts by 10.

Multiply by 12 to get an annual cash flow number.

So I would take the final monthly cash flow number, multiply by 12 and divide by the total amount of cash I put into the deal.I hope that is helpful.Mike