Real estate's "gross rent multiplier" is Wall Street's "sales to revenue",  "cap rate" is roughly "P/E ratio".When evaluating markets and investments I tend to start with GRM (or lazily the 1% rule), then attempt to return a cap rate based on assumptions about costs, then I work my way to multiple years of projections (assumptions about inflation, amortization, tax benefits, etc), and if I am partnering with one of my smart friends I have to pull up an IRR (internal rate of return).I also look at regional employment levels, median income to rent ratio in the zip code etc. 

Timothy Hillyer you seem to be ignoring the principal balance still remaining in the HELOC.

If you want things to remain the same, money is going to be tight.

The historical appreciate indicates it will not keep up with inflation and therefore loose value in inflation adjusted dollars.  

Long story short.. they inflated rent projections, sliced corners on property management, and almost left him holding the bag when the actual numbers came in.Vetting a syndicate means getting cozy with the sponsor’s track record, verifying their underwriting approach, and understanding whether they’ve handled rough waters before.

When I started investing in RE(not REI but different plays) pre-covid, never asked why after I started to remain on track.

  - Core Inflationary pressures remain high.

@Michael BengtsonMy experience in orlando is most properties I have came across are inflated.

The key will be to remain flexible, understand the local market dynamics, and position themselves to take advantage of the eventual boom when the project comes to life in 2025.

The result is an even deeper inflation than what we already suffer from.