What us "regular" people do is we take our gross rent and then multiply it at 85% or 80% (depending on what metric you want to use) and THEN we calculate our cash flow.

Then the avalanche of tirekickers calling.

You’ll be eligible to buy another house hack sooner (multiplying your net worth building machine).You can refinance if rates drop in 6 months to a year.

**Please Note:one thing that the MAO does not take into account is anything odd about the house that might make it harder to sell ⦠things like a busy street, ugly surrounding homes, a nearby commercial property, etc.In these cases, you have to think about how much the final price will have to be reduced to get it to sell.Make sure you either reduce your ARV or increase your Investor Buyer's profit by that amount, thus appropriately reducing your offer to the Seller.MAO Calculation Example:Let's say that you did all of your homework, and decided that after evaluating all the comparable sales data, you've determined that the ARV for your subject property is $140,000.Based on your evaluation of the property, you determined it would take about $15,000 to get it to look like all of the comps.To calculate the B/S/H, you take the $140,000 ARV, and multiplied it by 15% which equals $21,000 [$140,000 x .15 = $21,000].You decided that your profit should be $10,000 as the Assignment Fee for a wholesale.The Investor Buyer’s profit is calculated by multiplying the Rehab costs by $1.25 to get $19,000 [$15,000 x $1.25 = $18,750].Now, plug all these figures into the MAO formula and you calculate that the most you can offer on this property is $75,000.ARV:$140,000Rehab:$15,000B/S/H:$21,000Profit (you):$10,000Assignment FeeProfit (buyer):$19,000MAO$75,000But you’re a great negotiator and the Seller agreed to a $71,000 purchase price.

Based on this knowledge you can multiply Joe's CPC by his needed clicks (4 x 625) which would equal 2,500.I will mention that I don't pay attention to the CPC much but rather the CPA...

I make three times what the rent is.Me.....Thats not what I asked you....I asked you what is your gross monthly income before taxes.Her .....About $1,400Me.....Ma’am the rent is $595/mo and if you multiply that by three that means we want your gross monthly income before taxes to be about $1800 not $1400.Her.....Look, I’m at work right now why are you asking me all these questions like this...I don’t be trying to discuss this kind of stuff while I’m at work...dang!

Little snowballs now will make avalanches later.

Take the value of the property (lets use the 1 mil property again), subtract the land cost ( we will say 250k), then divide by 27.5 (which is the number of years you can depreciate the asset over, then multiply by the income tax bracket you are in (let's say 30%).

This is a game of patience and time is the ultimate wealth multiplier. 

Just now, tenants are starting to move, and it feels like an avalanche.