Figuring Purchase Price

[David Rupp]

I talked to a man today who said when he bought a couple of rentals 30 years ago, he used a rule of thumb that said "purchase price was monthly rent times 10." Anybody heard if this?

I also talked to a lady who is really active in my market say that her rule of thumb for rentals was ARV x .6% - repairs.

What do you guys use as a quick rule of thumb.

Thanks,
David