Simple and Fast Method of Analyzing Rental Property Investments: Gross Rent Multiplier Explained

[@joshcampos62]

He explains these the best! After I saw the cap rate video, I knew his channel is gold! Just graduated University and looking to break into the industry; thanks for the help.

[@SageRealEstate]

Thank you Josh. Wishing you the very best!

[@roopeshkrishnamoorthy4800]

amazing !!!

[@SageRealEstate]

Thank you!!

[@matthewkeller2877]

Is there a video of your working the math backwards to ensure the agent is not just saying a number for GRM? For instance, if I get the comps of others sold in a 30 mile radius, how would I work that backwards? Incredible video. An investor with over 50 properties sadly I still did not know this. So so good

[@VictorGarcia-ws9ze]

Hello, there. Great information. Do you provide live classes besides KZbin videos? I want to learn all of these formulas. to sharpen my skill to provide better service to my clientele. Thank you.

[@SageRealEstate]

Victor, we have a course that goes deep into this topic. This course will allow you to better serve your clients. We also have live monthly meetups. Check out our website for our upcoming meetings. More course info here: sage-real-estate.teachable.com/p/how-to-analyze-real-estate-investment-properties-like-a-pro

[@michaelgreco8592]

Great information.

[@SageRealEstate]

Glad it was helpful!

[@jonathancohen7196]

Great video! I have a question. At the end of the video you say that you increase the value of the home by $52,800 a year. Do you just mean $52,800? Wouldn't you have to increase the annual rent every year by $4,800 for this to equate to a $52,800 yearly increase in equity?

[@csinclair4577]

What happens if only 1/4 of the units is currently being rented? Would you still just "ASSUME" that once you buy, you'd be able to rent out the other 3 units at the prices you listed above?

[@SageRealEstate]

I would make that assumption yes if I'm in an area that has low vacancy and I know that it's easy to rent the units. If there's demand for rental units, then I would come in at market rents right off the bat.

[@B-H76]

Do you have a website or link to where the entire 6-2-1 formula is explained?

[@SageRealEstate]

Hello great question we definitely made a KZbin video covering the 621 formula. I'll find it and grab the link for you.

[@Ace-ht1is]

So then Southern california multifamily GRM would be 20 or up on average since prices overpriced?

[@SageRealEstate]

A 20 times gross rent multiplier right now would be super high. Of course, if you're looking at 2-3-4 unit buildings in highly desirable beach neighborhoods, you'll see some of that. But it is rare.

[@tracychen36]

Is the multiplier based on location or (and ) the type of retail? E.g daycare center, office, storage?

[@SageRealEstate]

The multiplier is derived from similar properties in similar area.

[@rasheedahaviellaford1862]

Okay so for clarification the gross multiplier number would be the value of the building?

[@rasheedahaviellaford1862]

Or what the seller is selling it for?

[@SageRealEstate]

Used to determine value of a building. From both a buyer and seller perspective.

[@michaelcisneros8557]

How many houses on average should I analyze to get a median grm and should I analyze houses that are already owned or houses that are on the market?

[@SageRealEstate]

5 properties would be a good start.

[@mulloyengland]

So the 9x 10x 11x will be stated on the listing? Or how do you figure out what multiplier to use?

[@SageRealEstate]

Not every real estate agent knows to put this on the listing. Although they should. It is a simple calculation I do encourage you to practice.

[@marissaclarktorres_realtor]

@@SageRealEstate I have been trying to google the answer to this, but can't seem to find anything straightforward. What data do you calculate to get the multiplier?

[@JohnnyPagnini]

How does capx and closing cost, etc factor in? In the scenario you gave, the multiplier should be the out the door, all-in cost, correct? Last question, for now, lol… are we also making the assumption that all units are currently occupied or does that not matter in this equation? Thanks for the amazing video by the way :)

[@B-H76]

I didnt understand what the point of the last part of the exercise when you increased the rents. I didnt understand the significance of $52k in relationship to your other multipler amounts

[@SageRealEstate]

The example was to show you how a small rental increase drastically increases the value of the property.

[@chitocalicho]

How do you find the multipliers?

[@SageRealEstate]

The multiplier comes from the recent sales in whatever market you're in.

[@CessnaPilot99]

What is the cap rate be a far superior measure..I want to know what the net is. Grm is a completely made up thing kind of, cap rate is how much is it actually making after the net operating income based on the multiplier you're willing to accept or pay, the cap rate

[@trevorcoates1056]

Really want to get started in building a real estate portfolio. Any chance we could converse about me potentially working for you for free so I can soak up the knowledge that goes into being in this market?

[@thedesicoder6391]

can you ffing get to the point .. dragging the video

[@SageRealEstate]

Thanks for the feedback. I promise to get better on future videos.

[@ZicoPDJ]

He did get to the point. You just have the attention span of a goldfish.