Ellen Mitchel
what is the 50% rule? what is the 2% rule both in the reports?
19 July 2018 | 6 replies
I keep it simple:What is the rent multiplier – price compared to rent as a percent.
Thomas Gerhart
Selling flips, trouble with FHA buyers
10 January 2018 | 11 replies
Just like sellers and listing agents might assume an FHA buyer has a rock bottom FICO, they might also assume they are barely scraping together 3.5% down, since many do in fact multiply target sales price by 3.5% and save up exactly that much money, unaware of closing costs, that things break in homes after you buy them, etc."
Mark Kitchens
Determining property value
11 April 2016 | 5 replies
Multiply by .8 and you'll know what 80% of market value is.
Ryan Standage
Understanding the 50% rule
4 December 2007 | 3 replies
Multiply your total miles by $0.485.
Ron Johnson
Absentee Landlord Legal Issues
15 September 2021 | 2 replies
Even if the units increased by only $30k we still made $220k in 4 months.So, plug your numbers into a number cruncher and dump the Colorado properties and purchase no less than a 4-plex because when you own a 4-plex or more units the property increases in value almost exponentially based on the Gross Multiplier when you increase the rents.
Joshua Dorkin
Do You Know ALL the Expenses Associated with a House Flip?
16 January 2022 | 150 replies
I was just asked a question via PM that I thought I should post here on this thread as it is very applicable to the topic.The question was, if the renovation costs should be estimated by taking $15 per square foot and multiplying by the number of square feet of the property.Here is my answer:"You are doing it wrong as you were advised incorrectly.
Joshua Dorkin
How to Calculate Fixed Costs on a Rehab, Flip, or Wholesale
31 March 2021 | 40 replies
To calculate the B/S/H, you take the $140,000 ARV, and multiplied it by 15% which equals $21,000 [$140,000 x .15 = $21,000].You decided that your profit should be $10,000 as the Assignment Fee for a wholesale.The Investor Buyer’s profit is calculated by multiplying the Rehab costs by $1.25 to get $19,000 [$15,000 x $1.25 = $18,750].Now, plug all these figures into the MAO formula and you calculate that the most you can offer on this property is $75,000.
Joshua Dorkin
The Basics of Real Estate Investment Deal Analysis
31 March 2021 | 76 replies
For example, let's say my pro forma uses the following assumptions, excluding any vacancy:Monthly Rent: $2,000Monthly Expenses, excluding mortgage: (Taxes, Insurance, HOA, CapEx, etc): $1,750NOI: $1,550Mortgage Payment: $1,300Monthly Cash flow: $250Now if we assume a 5% Vacancy Rate = $100 and include it as a negative revenue, NOI Margin (NOI / Income): 76.3%Cashflow Margin (Cashflow / Income): 7.9%Gross Rent Multiplier (Property Value / Annual Rent): 7.242% rule-of-thumb (Income / Purchase Price): 1.15%50% rule-of-thumb (Total Expenses / Income): 23.7%If we instead assume the vacancy rate is an expense: NOI Margin (NOI / Income): 72.5% Cashflow Margin (Cashflow / Income): 7.5%Gross Rent Multiplier (Property Value / Annual Rent): 6.882% rule-of-thumb (Income / Purchase Price): 1.21%50% rule-of-thumb (Total Expenses / Income): 27.5%I realize it may not seem like a material difference in this example, but I imagine in some scenarios it could lead you to make different decisions just based on how it's classified.
Account Closed
Is it possible to get a 600k commercial loan at 23?
22 January 2020 | 28 replies
So, even though you have a large downpayment saved up, you won't be able to multiply it by 4 to figure out how much property you can buy.
Hengky Lim
Which neighborhood to invest in Las Vegas
28 January 2021 | 36 replies
If you decided to use a average of the maintenance cost for the small car and the wrecked Humvee, you would be wrong on both.Even if such a universal maintenance constant could be determined, multiplying this constant (percentage) by the rent does not work.