Now multiply that by thousands of transactions and you get the point.

GRM (gross rent multiplier), maybe.

It starts with one action, then another, then another, and before you know it ... there's an avalanche.

Just for kicks multiply that time30 states; and you have a lot of potential Cash/investment notflowing around.b.

Year 2 you would then multiply the 10.833 by 1.0833 again, now resulting in a total of $11.74 (rounded up).  

Account ClosedI'd call it a killer deal because to buy a duplex with rents like that anywhere in Midtown, East Sac, Curtis Park / Land Park would easily cost you $450-550k+Here are the numbers at $340k purchase price (highest offer per listing agent) and $1,400 per month rent per unit:PRICE: $340,000Two 3/2's at ~1,200 sq ft each25% Down: $85,000Monthly Rents: $2,800Annual Rents: $33,600PITI @ 5%: $1,822PITI Cash-Flow Monthly: $978PITI Cash-Flow Annually: $11,731Gross Rent Multiplier: 10.121% Test: 0.82%Gross Annual Yield: $9.88%PITI Cash-on-Cash Return: 13.80%And with projected rent increases of 10% this year and 8.5% next year, in 2 years the gross rents will be over $3,300 and this deal just looks amazing at those numbers:Monthly Rents: $3,300Annual Rents: $39,600PITI @ 5%: $1,822PITI Cash-Flow Monthly: $1,478PITI Cash-Flow Annually: $17,731Gross Rent Multiplier: 8.591% Test: 0.97%Gross Annual Yield: $11.65%PITI Cash-on-Cash Return: 20.86%

-Because they are run down, the gross rent multiplier (GRM) you pay will be lower than if it was fixed up.  

(calculated by multiplying 2.9% by 70% -- 70% being the total ownership that investors receive for contributing $350,000)To sum this up, from day one an investment of $10,000 would be valued at $13,000. 

To my mind, financial leverage is not inherently your friend or enemy, it just multiplies everything without prejudice ... if it is a gain, that gain gets multiplied ... if it is a loss, that loss gets multiplied.

Active versus passive incomea) Is there a way to increase the multiplying effect of your time to create more active money?