In reference to my personal "magic" formula for rentals, it is 2% of sales price should be the monthly rents, or taking it from the other side, I am looking for a monthly Gross Rent Multiplier (GRM) of 50, or more commonly expressed as an annual GRM of 4.2.

Take the After Repaired Value (ARV) or what it will sell for all fixed up and multiply that by 70% or .70 .

1% of sales price should be the rents is another way of stating a monthly Gross Rent Multiplier (GRM) of 100.

There is the Sales Comparison Approach which is based on similar recent sales, the Cost Approach which is based on a value of the land and the cost to replace the existing improvements minus depreciation, and the Income Approach which is based on market rents and a Gross Rent Multiplier which is detemined through market research.Your other statement that banks will appraise the property right around the sale price even if the price is 200 and it's worth 500 is really disturbing.

I then annualize my cash flow (multiply it by 12), so I have $6,000 per year cash flow on the property.

Meaining you take the monthly rate and multiply it by 12.

Multiply that by 50 or 100 properties and you're talking about the difference between a failed business and a successful business.The 2% of gross rents that Mike mentioned is normally not feasible in most marketsI believe that the opposite is true.

That money is gone forever.When you factor in that the current market is very fragile; that a recession is looming; and that an avalanche of foreclosures is pending; then holding a bad property is VERY RISKY.

That makes it really easy to know the most I should offer for an apartment building by just taking:Current monthly rent / 2% * number of units in building = price I should no exceed on building offer (thats divide by 2 percent not multiply).

. ($90,000 minus $73,893.48) you will get the gain on sale of $16,106.52.To factor in appreciation, simply multiply the appreciation number to the original purchase price and add that together to make your sale price.