My basic, back-of-the-napkin metric is looking for gross annual revenues to equal 10% of purchase price.

A real rough back-of-the-napkin metric I use is if a Colorado property's gross annual STR revenues can equal 10% of the purchase price.

I've got stories that would be hard to believe on some of my seller financing deals, contract on a napkin, personal check for a notarized deed, hand shake deals, etc., etc. and a LOT of fun.

Use $70–$90 per sq. ft. for your napkin math.

So, some quick back of the napkin math for the theoretical turnkey scenario you described above:- Purchase price: $2.5 million- Down payment: $850K- Loan amount: $1.650 million - Gross Scheduled Income: $288K- Operating expense ratio: 35%- NOI: $178K- Debt service at 6.7% interest = $128K annually - Before tax cash flow = $47,1999 - Cash-on-cash Return in Year 1 = 5.55%A $47K / year return on an initial investment of $850K seems pretty modest, no?

I am amazed to see she drew sketches on napkins and took the vision all the way to fruition.  

Take my advice with a grain of salt...But a couple of back of the napkin numbers (primarily residential but I suspect it applies to commercial)Real estate (unleveraged) without value add will average rents + inflation (in appreciation).   

@Robert RixerHere’s my back of napkin approach to easily sort thru MF deals. 

Upon inspection, they found sanitary napkins and assumed that was the issue.

The 50% rule - in my opinion- is used solely as a quick back of napkin calculation to determine if it is worthwhile to do more investigating of a property.