@Ben Leybovich 2% rules makes as much sense as:1% ruleGross Rent Multiplier$50,000 (or some other price) per unitGross Incomeand any other figure, formula, rule of thumb or anything else that relies solely on the gross income without considering expenses, condition of the property, location of the neighborhood, and other factors.

The rent multiplier is .5 

Sub2 already has inherent risks that appear to multiplied by at least two if you "sandwich" it or "wrap" it.Putting the sub2 part aside, I'm more interested in the buyers and sellers and the marketing done for such deals.

To compute odd days interest take the note rate X the balance divide by 360 then multiply by the number of days to find the amount.Points are pre-paid interest, regardless of what fee they are applied to, like origination charges.

The property has a rental history.Monthly expenses = 830Monthly cash flow = 619Pro Forma Cap Rate = 13.50%Purchase cap rate = 13.74%Cash on Cash ROI - 40.85%-----------------------------------Financial ProjectionsTotal Initial Equity:$16,000.00Gross Rent Multiplier:4.64Income-Expense Ratio (2% Rule):1.76%ARV based on Cap Rate:----------------------------------50% Rule Cash Flow EstimatesTotal Monthly Income:$1,450.00x50% for Expenses:$725.00Monthly Payment/Interest Payment:$305.55Total Monthly Cash-flow using 50% Rule:$419.45----------------------It seems like a good deal but I am a newbie! 

I think this model is about borrowing that money from your policy, and making payments back into it charging yourself the same interest any other lender would, and that way the money starts to multiply at a faster rate.Can this be done with different savings vehicles like 401k or IRA?

:DHe likes to say that he earns money, and I multiply it.  

I'd take the million tax-free for sure because I'd have fun multiplying it.

If you multiply the monthly rent by 50, that is the same as dividing by 0.02.Also, there is the 50% rule of expenses.I find it is nearly impossible to find a property in my area that will cash flow using these numbers, but will keep looking.

Take all of the hours you will be working on this place whether managing it yourself, or managing the managers and multiply that by what your time/hr is worth.This is why investing in appreciation is not a good play in my mind.