After examining income capitalization methods and formulas, you will learn how rates and multipliers are derived.

Dog walkers seem to multiplying every month, and if you're into parks and trails, I have the best one in the  city a football throw away from my door.

In absence of an appraisal, you need to determine the market GIM (gross income multiplier) from comparables and apply this to your projected income.

It is an education on how 10 percent increase/decrease multiply in a hurry when dealing with several units under one roof.

Purchase InfoPurchase Price $660,000- First Mortgage -$462,000- Second Mortgage -$0= Downpayment $198,000+ Buying Costs $13,200+ Initial Improvements $10,000= Initial Cash Invested $221,200Square Feet (21 Units) 14,250Cost per Square Foot $46Monthly Rent per Square Foot $0.82Cost per Unit $31,429Average Monthly Rent per Unit $557Mortgages First SecondLoan-To-Cost Ratio 70% 0%Loan-To-Value Ratio 70% 0%Loan Amount $462,000 $0Loan Type AmortizingTerm 30 YearsInterest Rate 6%Payment $2,769.92 $0.00Financial Metrics (Year 1)Annual Gross Rent Multiplier 4.7Operating Expense Ratio 35.9%Debt Coverage Ratio 2.57Cap Rate (Purchase Price) 13.0%Cash on Cash Return 23.6%Income Monthly AnnualGross Rent $11,700 $140,400Vacancy Loss -$585 -$7,020Operating Income $11,115 $133,380Expenses (% of Income) Monthly AnnualCleaning & Maintenance (9%) -$1,000 -$12,000Insurance (4%) -$416 -$4,992Management Fees (9%) -$1,000 -$12,004Taxes (7%) -$782 -$9,387Utilities (6%) -$615 -$7,380Garbage Collection (2%) -$176 -$2,108Operating Expenses (36%) -$3,989 -$47,871Net Performance Monthly AnnualNet Operating Income $7,126 $85,509- Mortgage Payments -$2,770 -$33,239- Year 1 Improvements -$0 -$0= Cash Flow $4,356 $52,270

Get an average sqft. and multiply that by your home's sqft. 

If you multiply $253,000 by 70% it equals $177,100.  

Even when you have worked out your own 'rules' that should be applicable to your market, I would still recommend that you NEVER multiply out that percentage to arrive at your 100% Maximum Offer!

Your max offer formula should look like thisMax offer = ARV x 0.70 - estimate repairs  <-----------so your ARV is 310k multiply that by the rule of thumb 0.70 and you got 217k.

To simplify how you view the value of the time involved, try to quantify the number of hours/month spent dealing with misc. tasks, then multiply that times a reasonable hourly fee.