GRM stands for Gross Rent Multiple.Gross Rent Multiplier is the number of years the property would take to pay for itself in gross received rent.  100,000 sales price / 15,000 gross rent = 6.67 GRMDSCR = Debt Service Coverage Ratio.Is a calculation used by mostly banks, that tracks your ability to service the monthly payments on the debt

its very hot.. but profit margins all in all are thin when taken as a % of the gross project amount.But houses also sell in 1 to 5 days.. if they are in the major metro area.We have a huge play going on now .. of tear down and build McMansions.. not really McMansions but little 1920 bungaloos are taken down and two story period homes are built ( PDX 4 square) being popular.. and on corner lots you can do a common wall and get 5k sq ft in two homes on a 4k foot lot.. and the homes will sell for depending on which blocks 450 to 750 each.

First, realize that your $40K per year is your gross rents.  

(Actual numbers from bank loans)Gross Monthly rent: $7200Minus 50% expensesExpected Net Operating Income: $3600Monthly Debt Payment: $2353Expected Monthly cash flow: $1247Cap Rate is still 10.8%Cash on cash return is 14.964%First year principle pay down on the loan: $13,918Total return on 100K investment for the first year: 28.882%My input is always to choose the scenario that works for the investor.  

Unless you're super madly in love with your business name, it's really no issue who ends up with the business since it's so new and hasn't grossed any income.  

There's no way you will get a 14% cap rate based on the numbers you provided.Your NOI needs to be 56000 to have a cap rate like that, and your gross income is even less than that. 

In reality this would be lower because there are other monthly expenses.You have to know what the other expenses are per month to determine both the capitalization rate [yearly NET income / building cost ] and gross rate multiplier [Cost / Gross Rent per year].

Or should I put the gross rent as the amount I'll get from the other units?

Shouldn't the NOI and Expenses equal the Gross Income?  

.$1900 gross rent for $150k over ten years is $228,000 gross income investing 20% upfront on $150k here in chicago which is $30k in cash to make $228k in income over 10 years. $228k divided by $30k is 760% which is 76% per year.