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Ernesto Hernandez
  • Realtor
  • San Francisco, CA
361
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408
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Gross Rent X10 Multi Family Valuation

Ernesto Hernandez
  • Realtor
  • San Francisco, CA
Posted

In William Nickerson's book, How I turned 1K into 5M he frequently uses the valuation model of 10X the Annual Gross rents to price a multi family property.

Example, 50,000 a year in rents = 500,000 purchase price (though he also often reminds to reader to negotiate everything by 20%)

Is this formula still applicable today? Curious to know why I have not heard it mentioned more often.