Lenders typically want >1.25GRM, Gross Rent Multiplier = Purchase price / annual revenue (assume 0% vacancy).

Of course, they could always come back with an attorney or a nonprofit organization and make trouble for the landlord.To me, in most cases, paying the statutory relocation fee is a bargain when you multiply the additional rent by your cap rate or GRM and see the difference that market rents will make to the worth of the building.  

The rents could be increased a bit or upgrade this or that, but to get to 1.5% or 2% gross rent multiplier after improvement is almost impossible.

//End quoteThe precise formula is that your loan-to-value ratio multiplied by your annual constant must be lower than your cap rate to get positive cash flow.Note that your cost of equity in a WACC calculation will differ from every other investor so the price YOU will pay for the investment will also differ from what they will pay.

This is then multiplied by a number determined to be the appropriate cap rate for the property to arrive at a valuation.

Essentially what a yield return is; a Gross Rent Multiplier.

Then multiply that number by the condition of the property.

So, if you want the monthly rents to be 1% of the purchase price, simply multiply the monthly rent by 100.

p=2&id=343417#Basically, take your purchase price and multiply that by .015.

So take your GPRI at market rates, subtract for vacancy, and multiply by .3, and that should give you a ballpark NOI to then apply your cap rate, probably around 9% for this property and market, and that will give you an estimated value.