Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Easiest $2 Million You’ll Ever Make! #multifamily #sellerfinancing

8 Mar 2023 · 1 min

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Raise rents on a 100-unit building from $800 to $900 per unit and you add $120,000 in annual cash flow. At a 6% cap rate, that's worth $2 million in net worth. The speaker says to keep increases below market rate to balance tenant impact with owner upside.

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We're rich! That's fantastic. How much money does that make on a net worth gain? 100 units, $100. Where we buy an extra $10,000 a month, $120,000 a year, we're in a 6% rate of return market. So if you take the $120,000 a year in new income divided by 0.06, it adds $2 million to your net worth. That is the easiest $2 million you can ever make. Now there's some people out there that are going to say, well, that's not very nice to your tenants. Well, don't raise it above market. Keep your rent below market, but you bump it up a little closer to where it is from where it was. If it's at $800 and market rents $1,000, take it to $900. You can still pick up your $2 million.