Actually it's dumber than I thought, it's apparently because .06 is the divider for what someone is willing to pay for a certain amount of cash flow (i.e. for this example since rent is being raised $300 a year, 300/.06 means someone would pay $5,000 to obtain that cash flow). So he is saying that in a completely frictionless vacuum, increasing the price of 150 rental units by $25 a month increases their asset value by $750,000.

[–] Chump@hexbear.net 20 points 4 days ago

This is the rental equivalent of stranded castaways trading watches back and forth forever

[–] came_apart_at_Kmart@hexbear.net 14 points 4 days ago

shit, i would have thought the 6% kicker represented avoided interest on the loan he took to buy the unit, assuming he's putting the extra revenue from raised rent toward principal.

one of the shitty things about "real estate investors" is that they leverage their existing assets to borrow more money to buy more property and some are real aggressive, so they get into trouble and "have" to put off repairs, raise rents, and generally fuck their tenants even harder when they get into cash flow trouble.

all of it serving to push housing further out of reach, make it worse, and get already rich people paid more and more of soing less.