Making sure I understand, I would take my added up rent $2,200 and multiply by 23% 2,200 x .23= 506 a month towards, Vacancy 8%-$41 Repairs 5%-$25Capex 10% - $51(which is the roof, Furnace, water heater, floor, kitchen and bath appliances).

Higher price = bigger loan = higher mortgage payment = less cash flow when rented.More Units = More Cash Flow -- I recently completed a thorough analysis of the multifamily properties available in the Sacramento area, and the only properties that passed the 1% Test (monthly gross rents close to 1% of purchase price) or had a Gross Rent Multiplier of 10 or below (time in years it would take for property's gross rents to pay for the purchase price of property) were all multifamily units, and more so 3-4 plexes.Financing is the Same as Single Family Home -- there's no added loan requirements, and you can still qualify to purchase the property with FHA or VA loan if you so choose (thank you for your service by the way!)

They are using an approach called Gross Rent Multiplier where they use the gross annual rent of the property to determine property value.

In some areas, you have to count up the tax stamps and multiply by whatever value each tax stamp represents.

In fact, a lot of buying good investment properties is to find properties with a low GRM (gross rent multiplier).

So I multiply that by 3 times that I will be sending them my marketing post cards.

In this case, a contractor who seemingly gave a low bid to get the job and then tried to multiply it by 5.

Therefore the appraisal form, which is set by the Banks/Lenders are different than commercial property's, which typically place more weight on the income approach.The small residential income property appraisal report, address comparable rental data and breaks things down into items like value per bedrooms, value per gross building area, value per unit and gross rent multiplier, etc.

So you find the ARV, multiply it by 70%, and then subtract your repairs costs and that’s the price you should buy at.

Multiply that by the cost/month in 4 for each line item, sum them up, round up or add margin, and you now have how much you need currently in cash in your capital reserve account.