Gross Rental Multiplier - Metrics Driven Real Estate Investing

At Broadleaf, we are often asked how do we determine whether a multifamily investment opportunity is worth pursuing. In short, we have a strict underwriting criteria that a property must successfully pass in order to determine whether to make an offer to purchase. One of those metrics is the Gross Rental Multiplier.

This metrics calculates what an investor will pay per dollar of rent. This is not a meaningful metric by itself, but when compared to similar properties in an specific area, it provides a meaningful comparison to help ensure that an investor is not overpaying.??

See below how we are paying 16% less (almost $200K less) for 2 Henchman than other investors in the Worcester market:??

• $6.32 -- Our Latest Investment
• $7.53 -- The Worcester Market

This metric, coupled with many others, help to determine the strength of the deal and whether it is worth pursuing.