It's a way of saying "people in the market are willing to get 4% return on net income in an A area in this market, so if I know the net income of the 6 unit subject property, I can derive what someone would be willing to pay i.e. what it might be worth".Incidentally, when people talk about the "income approach" as one of the three appraisal methods (the others being sales comparables and replacement cost), it's usually introduced for exactly this scenario - that there are usually plenty of comps for 1-4 families and buyers are more likely to look at recent sales of similar properties to determine what they'll be willing to pay, but once you start looking at 5+ units there are both far fewer comps and the buyers are investors who really are looking at cash flow more than similar property sales.Anyway, I hope this helps.

4 and 8 plexes are not plentiful...If I refinance or cashout...the rent will not pay for the mortgage...as the mortgage will be too high...right now most are paying for themselves..normally owner financing rates are higher than banks the ones I checked...so then the rents wont pay for the mortgage monthly..on the portfolio loans...I havent checked this one...my loan officer friend said those interest rates...will be high...so be hard to find house where rent will pay the mortgage...

There's plenty of 4 and 5 bedrooms in that price point or maybe something with an unfinished basement that you can later have finished.

We believe it will increase the value of the house and there's plenty of equity to refinance and recoup the money spent; but we're trying to save that money to reinvest into something else. 

That said, I missed plenty of deals in this stage of my investing career although I didn't necessarily look at it that way.

That's the first order of business...and $30k is plenty of money

To be fair there are plenty of realtors who are also investors, but the vast majority of realtors aren't.

I think a big component that you can & need to nail down is cost of constructing on a site with plenty of granite.

There are plenty of professionals on these forums on BP in general that could give you guidance.

Plenty of room.