Just ran across a listing for what looks like a turn-key 4plex in East Hollywood priced at $1,095,000.
The listing advertised a 12x GRM. Now, that’s not a great deal or anything, but at a little less, maybe 11.5x, it would probably work for someone.
So, I prepared to shoot an email out to my agents so that they, in turn, could alert relevant clients.
But something stopped me. I figured I’d check on the rent roll, just to see how the close the competition is getting to matching the rents we’re capable of getting.
Here are the rents:
Can you spot the problem?
Go ahead and add the above numbers up and multiply by 12 to get the annual gross rent. What you’ll find is that the number is $78,300.
Now multiply the gross by the advertised 12x GRM… $939,600. But that’s not the list price, is it? The list price is $1,095,000, or 14x the rent.
Super glad I spent time reviewing that listing, though. Thanks, guys.