Not all banks count rental income the same, or will allow you to take higher percentage of equity out for a refinance.

The banks also only could rental income as passive income, and only count a % of that.

If you talk to locals, they will tell you not to count on appreciation either. 

Currently up to 2,500 multifamily units and counting.

Take location of building, parcel size, parcel shape and access to it, sightlines, daily traffic counts, crime for area, population levels, median income levels, age of building, etc. into consideration.You really have to know how to repurpose the site and run your development numbers.

While appraisers are supposed to take income into consideration, with any property with less than 5 units they will stick mainly to the comparable approach meaning they go strictly off of what other places with similar unit counts have sold for in the area.

When he decides to rent the property out, he will be able to count the rental income to improve his DTI's as well. 

If you've ever had any kind of installment loan, ie car loan, that will look great also.If you are currently renting, there are websites out there that will count your on-time rent to positive info on your credit report. 

20201) find a fourplex that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable - satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K - giving you ~$3K in appreciation alone (not counting potential rental cash flow)20211) cut out as many expenses as you can on the fourplex & have the highest rents possible2) assuming 3% appreciation the property should now be worth ~$34K - giving you ~$4K in appreciation alone3) assuming all expenses are paid & $650/month individual unit rent, the total rental cash flow from all four units should be $1600/month - total annual profit: $4K (fourplex appreciation) + $19,200 (annual rent) = $23,20020221) buy fourplex II (using the profit from fourplex I) that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable - satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K - giving you ~$3K in appreciation alone (not counting potential rental cash flow)5) assuming 3% appreciation fourplex I should now be worth ~$35K - giving you ~$5K in appreciation alone6) assuming all expenses are paid & $650/month individual unit rent, the total rental cash flow from all four fourplex I units should be $1600/month - fourplex II is still being rehabbed - total annual profit: $5K (fourplex I appreciation) + $3K (fourplex II appreciation) + $19,200 (fourplex I annual rent) = $27,20020231) buy fourplex III (using the profits from fourplexes I & II) that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable - satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K - giving you ~$3K in appreciation alone (not counting potential rental cash flow)5) assuming 3% appreciation: - fourplex I should now be worth ~$36K - fourplex II should now be worth ~$35K - fourplex III should now be worth ~$33K - giving you ~$14K in appreciation on all three fourplexes6) assuming all expenses are paid & $700/month individual unit rent, the total rental cash flow from all eight fourplex units should be $3200/month - fourplex III is still being rehabbed - total annual profit: $6K (fourplex I appreciation) + $5K (fourplex II appreciation) + $3K (fourplex III appreciation) + $38,400 (fourplexes I & II annual rent) = $52,40020241) cut out as many expenses as you can on the fourplexes & have the highest rents possible2) assuming 3% appreciation: - fourplex I should now be worth ~$37K - fourplex II should now be worth ~$36K - fourplex III should now be worth ~$34K - giving you ~$17K in appreciation on all three fourplexes3) assuming all expenses are paid & $700/month individual unit rent, the total rental cash flow from all twelve fourplex units should be $4800/month - total equity: $37K (fourplex I price) + $36K (fourplex II price) + $34K (fourplex III price) = $107K - total annual profit: $7K (fourplex I appreciation) + $6K (fourplex II appreciation) + $4K (fourplex III appreciation) + $57,600 (annual rent) = $74,60020251) sell the fourplexes - use the 1031 tax exchange during the transaction to defer capital gains taxes to a later date (covered in SELLING section)2) buy twenty four unit apartment building w/ that $107K equity as a 20% down payment for a building priced at ~$535K (remaining loan amount is ~$428K) - after negotiating for lower price & seller pay closing costs of course!

20201) find a fourplex that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable- satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K- giving you ~$3K in appreciation alone (not counting potential rental cash flow)20211) cut out as many expenses as you can on the fourplex & have the highest rents possible2) assuming 3% appreciation the property should now be worth ~$34K- giving you ~$4K in appreciation alone3) assuming all expenses are paid & $650/month individual unit rent, the total rental cash flow from all four units should be $1600/month- total annual profit: $4K (fourplex appreciation) + $19,200 (annual rent) = $23,20020221) buy fourplex II (using the profit from fourplex I) that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable- satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K- giving you ~$3K in appreciation alone (not counting potential rental cash flow)5) assuming 3% appreciation fourplex I should now be worth ~$35K- giving you ~$5K in appreciation alone6) assuming all expenses are paid & $650/month individual unit rent, the total rental cash flow from all four fourplex I units should be $1600/month- fourplex II is still being rehabbed- total annual profit: $5K (fourplex I appreciation) + $3K (fourplex II appreciation) + $19,200 (fourplex I annual rent) = $27,20020231) buy fourplex III (using the profits from fourplexes I & II) that needs a little help listed for $35K2) offer $30K cash plus ask the seller to pay closing costs3) spend $20K to rehab the property & make it rentable- satisfying the standard 10% forced appreciation during the first year4) the property should now be worth ~$33K- giving you ~$3K in appreciation alone (not counting potential rental cash flow)5) assuming 3% appreciation:- fourplex I should now be worth ~$36K- fourplex II should now be worth ~$35K- fourplex III should now be worth ~$33K- giving you ~$14K in appreciation on all three fourplexes6) assuming all expenses are paid & $700/month individual unit rent, the total rental cash flow from all eight fourplex units should be $3200/month- fourplex III is still being rehabbed- total annual profit: $6K (fourplex I appreciation) + $5K (fourplex II appreciation) + $3K (fourplex III appreciation) + $38,400 (fourplexes I & II annual rent) = $52,40020241) cut out as many expenses as you can on the fourplexes & have the highest rents possible2) assuming 3% appreciation:- fourplex I should now be worth ~$37K- fourplex II should now be worth ~$36K- fourplex III should now be worth ~$34K- giving you ~$17K in appreciation on all three fourplexes3) assuming all expenses are paid & $700/month individual unit rent, the total rental cash flow from all twelve fourplex units should be $4800/month- total equity: $37K (fourplex I price) + $36K (fourplex II price) + $34K (fourplex III price) = $107K- total annual profit: $7K (fourplex I appreciation) + $6K (fourplex II appreciation) + $4K (fourplex III appreciation) + $57,600 (annual rent) = $74,60020251) sell the fourplexes- use the 1031 tax exchange during the transaction to defer capital gains taxes to a later date (covered in SELLING section)2) buy twenty four unit apartment building w/ that $107K equity as a 20% down payment for a building priced at ~$535K (remaining loan amount is ~$428K)- after negotiating for lower price & seller pay closing costs of course!