When eyeing multifamily investments, you’ll likely encounter two key metrics – cap rates and gross rent multipliers (GRM).At first glance, they seem similar, but there are some important differences between the two.The GRM simply divides the purchase price by the property’s total potential rental income–it doesn’t account for operating expenses.Cap rates, on the other hand, factor in both income AND expenses to give a more complete profitability picture.The main advantage of cap rates is their ability to evaluate better and compare investment returns, risks, and value.

You want to multiply your returns and not adding one house at the time. x > + .

Using the Gross Rent Multiplier appraisal method, the property was appraised at $400,000, and I successfully sold it just below this price within a few weeks of the appraisal.

A typical Gross Rent Multiplier (GRM) in a good LA neighborhood might be 18.

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%.

It’s been up up up for a while now, due for one of its cyclical avalanches.

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.