How to use cap rate, gross rent multiplier and price per door to spot overpriced multifamily deals
I look at multifamily deals the way some people read a restaurant menu: first for the obvious numbers, then for the hidden costs that make a “great value” deceptive. Over the years I’ve relied on three quick, complementary metrics to sniff out overpriced apartment buildings before I spend time on deeper underwriting: cap rate, gross rent multiplier (GRM), and price per door. Each tells a different story. Together, they form a fast,...