Its a lot of work, but I couldn't agree more abut the cash flow multiplier.

A huge deal in the profit equation when you pay $100-200k in taxes.The ROI counting taxes returned multiplies many times upfront.I need a good team though…

** Cash Flow (Monthly) ** Rent: $ 1,300 Vacancy: 8% (-$ 104)OI: $1196 Expenses: -$ 561 (all in for taxes-$2100, ins-$1000, PM-12%, r$m $780, capX $780, license $204) Net Operating Income: $ 635PI: $243 (based on 60k purchase) Cash Flow: $392 (this is based on 60K)looking to do costs out of pocket strong maybe on rolling into a construction loan (called by many names). if rehab costs are financed it would be $149$ cash flow relative to all other monthly expenses ** Returns ** Cap Rate: 12.7% Rent to Price: 2.2% Gross Rent Multiplier: 3.8 COC: 8.8% ** Notes ** Looks to have foundation issues back wall of garage.

As you grow and build equity and a network around you, your options will multiply. 

Instead, it appears that they just decided to take the Market Value and multiply it by a certain percentage. 4.

So, if the comp is located in an area that may have a 10% greater appeal, you’d adjust its sale price down 10%, to account for the Subject’s inferior location.4) Determine a reasonable GRM (gross rent multiplier) and apply that to any missing units of your comps.

Screening tenants is a crucial part of being a property manager and if your property manager only uses the 3x multiplier rule; that is a huge red flag.

Come up with your price per hour and then multiply it by the hours you think you will be dedicating to the project.

Don't start with cap rate, gross rent multiplier, 1% rule, or any other metric.

Some appraisers might rely more on the depreciated cost to value the adu or use an income approach multiplying the market rent by the average grm (gross rental multiplier).