Thus, need to multiply $120k by the expense ratio (generally understood to be 50%, although it can vary depending on property) before using it in the cap rate formula.Using your example …1% rule: Gross annual revenue would be $10k * 12 months = $120k … as you said.Missing step: Net rents are $120k * 50% = $60kCap rate: $60k/$1M = 6%So, a 6% cap rate is the same as the 1% rule.This is roughly speaking of course.

If it is strictly rental revenue, make sure that the total revenue from a booking from the direct booking website or VRBO has cleaning fee, guest service fees, sales tax all removed before multiplying 20% for commissions. 

Ok, so let's examine a potential deal:Purchase: 175kRehab: 55kARV: 350kSo right away, I wanna take the ARV and multiply it by 72.5%.

My point that doubling the pay of entry level and no skills workers has a multiplying effect everywhere else in the economy.

Reason being, at this point in your life it sounds as though you are younger, and truly your money would be best spent multiplied.

Ok, so let's examine your deal and see what terms it would get:Purchase: 175kRehab: 55kARV: 350kSo right away, I wanna take the ARV and multiply it by 72.5%. 

To get $10000 per month in cash flow, I’ll make some assumptionsMultiply $10k by 1.25 DSCR to get your monthly net income= $12,500Multiply times 12 to get annual net cash flow = $150k NOIFor information’s sake, assume 50% expense ratio, so multiply $150k x 2 to get an EGI of $300kAssume a Class B in those Texas metros, assume a 5.5% cap, so divide you NOI/Cap Rate to get a value of $2.7MAssume $100k per unit, so you’re looking at around a 27-30 unit property.

Used gross rent multiplier of $5000 a month rental to achieve higher value for sale as a business.

All of which is a normal day in the world of real estate investing.If you're going to do syndication, multiply that amount of $ "flushed" x 10.I'm not here but bust your bubble: you seem like a spirited young man ready to make your way in the world, and that's good.

Second, businesses are valued on gross revenue or net profit multipliers.