btw: An appraisal for MFUs is expensive and part of the buyer's loan process, therefore their expense.As a Seller, I would demand a Pe-Approvial letter as well as a Verification of Funds for the down payment before I would accept any offer - - otherwise Joey Buyer is just another lookie-lue. 

PE firms? 

The P/E ratios are so enormous that I may consider inverse funds or commodities soon. 

I, too, agree with his philosophy in that it is quite easy to make money in a prosperous industry whereas it can be quite difficult to make money in a declining industry even if you have very talented people working for you.Although Buffett has not explicitly stated his investment criteria, if you examine his deals during his peak years, you will find that he liked buying companies with ROEs greater than 20% (with low leverage) and a P/E ratio of around 8 to 12.

Joey Berkey, PE

I have house hacked twice now.I always use these 6 formulas when doing basic numbers on a property.The 1% rule- example is a $100,000 House should rent for around $1,000 per monthThe 50% rule- 50% of the gross rents of the property will go towards expenses on the property that don’t include principal and interest payment.Gross rent multiplier- similar to a P/E ratio where you take the purchase price and divide by the gross rents for the property Cap rate- tells us what a property will produce after expenses.

Stocks are not cheap by any generally used metric: 10-year trailing cyclically-adjusted P/E, dividend yield, or replacement cost of net assets vs share price (Q ratio).

This in itself should bring the value of the property from $5,600,000 to $7,200,000 (and this is considering a more conservative exit cap rate of 100 bp above the enter one), so at the end of the day the increased value would make the investment IRR in the 15-20%.I have a considerable amount of my portfolio in the stock market and believe me, no 2.5% dividend yield stock is going to deliver that performance over the next few years, especially considering the current inflated P/E ratios in the market, unless we gamble on ridiculous appreciation, so I fail to see how your comparison is fair.

No surprise P/E and Hedge Funds and others have already identified the growth in STRs and started pouring money into the space, namely through tech firms, data firms, and STR management companies, but the portfolios of STR rental assets is growing too!

So it boils down to confidence in my analysis and domain knowledge.7) Rationally, math is math and unless I made a horrible mistake in one or more assumptions, the numbers do not lie. 8) In my current analysis/screening of properties/deals I am looking for a) positive cashflow;b) operating expense ratio <50%; c) debt coverage >=1.5;d) PE <3;e) Cash-on-Cash of 10-12+;f) BER <=75 (80 at the max)g) I tend not to be driven terribly by the CAP rate if the cash-on-cash is good - in the local market it is extremely rare to find a multi-unit with a CAP >7.5 to 9In our analysis we use an opportunity cost of 8%; a maintenance & CAPX set aside of 10%; and assume a vacancy rate of 8.33% (1 month in 12) ... we try to be conservative9) I do realise that while the above ratios have been fine for us, they may not be sufficient for a potential private money financier.