We don’t really care much for multiplying the cash, we just want to make sure we don’t lose it overnight.

Purchase Info Initial Market Value $65,000 Purchase Price $39,000 + Buying Costs $780 + Initial Improvements $0 = Initial Cash Invested $39,780 Income Monthly Annual Gross Rent $750 $9,000 Vacancy Loss ($60) ($720) Operating Income $690 $8,280 Expenses (% of Income) Monthly Annual Cleaning & Maintenance (6%) ($40) ($480) Insurance (7%) ($50) ($600) Management Fees (10%) ($69) ($828) Taxes (10%) ($67) ($804) Operating Expenses (33%) ($226) ($2,712) Financial Metrics (Year 1) Annual Gross Rent Multiplier 4.3 Operating Expense Ratio 32.8% Cap Rate (Purchase Price) 14.3% Cash on Cash Return 14.0% Net Performance Monthly Annual Net Operating Income $464 $5,568 - Year 1 Improvements ($0) ($0) = Cash Flow $464 $5,568

on the high side, 90k would be my ceiling (assuming no repairs are needed)i used the following assumptions ... broad strokesPP: 90kannual rent: 18,540vacancy: 10%, could be higher or lower based on your areaSWAG expenses: 9,270 (50%) ruleCAP: 8.24%gross rent multiplier: 4.85% financed amount: 67.5Kdown: 22.5kannual debt svc: 4104DSCR: 1.81year 1 NOI: 7416before tax cash flow: 3,312before tax cash on cash return: 14.72%assuming a 5 year hold, at 90k you could expect an IRR 9.7% (assumed 1.5% increase in rent/expenses and 5% cost of sale.)i found a large deviation in per unit comps for 2-4 unit properties in malvern, pa (assuming you're looking close to home).

Or, its the inverse of the Gross Rent Multiplier GRM = purchase price / annual gross scheduled rent.

But $30 per month multiplied by 6, 10 or 15 properties starts to add up.So I called him up today to find out his trick.

People know people so you will only multiply your reach.

The yearly cash flow is just the monthly multiplied by 12.

Purchase Analysis & Returns PURCHASE Purchase Price: $ 120,000 Purchase Costs: + $ 3,750 Rehab Costs: + $ 10,000 Total Cash Needed: = $ 133,750 Price Per Square Foot: $ 65.1 RETURNS & RATIOS (Year 1) Cap Rate: 13.3% Cash on Cash: 11.9% Return on Investment: 92.9% Return on Equity: 6.6% Internal Rate of Return: 92.9% Rent to Value: 2.3% Gross Rent Multiplier: 3.7 FINANCING Cash Purchase ASSUMPTIONS Vacancy: 10% Rent Collection: Monthly Appreciation: 3% Per Year Income Increase: 2% Per Year Expenses Increase: 2% Per Year Selling Costs: 6% of Sales Price Land Value: $ 0 PURCHASE COSTS Home Inspection: $ 350 Appraisal: $ 400 Escrow Fees: $ 3,000 Total: $ 3,750 REHAB COSTS Total: $ 10,000

Multiply those numbers by the costs (If you are buying at HD, go to their website and "add to cart" to make it easier).

Then calculate your maximum offer price by multiplying the ARV times your required discount and then subtracting rehab.