The $100 Rent Rule The 30-Second Equity Calculator

The $100 Rent Rule The 30-Second Equity Calculator

The $100 Rent Rule

The 30-Second Equity Calculator

The rule comes from the value formula:

Value = NOI ÷ Cap Rate

But we simplify it using rent increases.

Step 1

Calculate NOI Increase

Every rent increase adds income.

Formula:

Rent Increase × Units × 12

Example:

Rent increase
$100

Units
20

$100 × 20 × 12

= $24,000 NOI increase

Step 2

Convert NOI to Property Value

Now divide by the cap rate.

Assume a 5% cap rate

$24,000 ÷ 0.05

= $480,000 value increase

The $100 Rent Rule

At a 5% cap rate

Every $100 rent increase per unit creates roughly

$400K–$500K in value per 20 units

Quick Mental Formula

Investors simplify it like this:

$100 rent increase
= about $20,000 NOI per 20 units

At a 5 cap

$20,000 ÷ 0.05

= $400,000 value

Example Zia Should Remember

Property

20 units

Current rent

$800

Market rent

$1,600

Rent gap

$800

Total NOI Increase

$800 × 20 × 12

= $192,000 NOI increase

Value Created

192,000 ÷ 0.05

= $3,840,000 value increase

That Is Why Investors Get Rich

They don't just see rent.

They see future property value.

Zia Training Rule

When evaluating apartments:

1️⃣ Find the rent gap

2️⃣ Multiply by units

3️⃣ Multiply by 12

4️⃣ Divide by cap rate

That instantly reveals value creation potential.

30-Second Deal Example

Property

24 units

Current rent

$900

Market rent

$1,500

Rent gap

$600

NOI Increase

600 × 24 × 12

= $172,800

Value Created

172,800 ÷ 0.05

= $3,456,000

That is a $3.4M upside deal.

Why Grant Says These Deals Are Everywhere

Because many older apartments have rents $400–$900 below market.

Owners often:

• never raised rents
• self-managed poorly
• are retiring
• bought decades ago

So the income is artificially low.

That creates opportunity.

The Shortcut Rule

This is the fast version investors memorize:

For every $100 rent increase

Value created per unit ≈



Cap RateValue Created
5%$24,000
6%$20,000
7%$17,000

Example

50 units

Rent increase

$200

At a 6 cap

Value created per unit

$20,000

Total value

$20,000 × 50 × 2

= $2,000,000 value created

One Line Zia Should Remember

Equity Created = (Rent Increase × Units × 12) ÷ Cap Rate

That single formula is how investors spot million-dollar deals instantly.

    • Related Articles

    • The “$1 Rent = $200 Value” Rule

      The “$1 Rent = $200 Value” Rule This shortcut comes directly from the core formula: Value = NOI ÷ Cap Rate But investors simplify it so they can estimate value instantly. Step 1 — Convert Rent to Annual NOI Every $1 rent increase per unit adds: $1 × ...

    • The “$10 Rent = $200K Rule”

      The “$10 Rent = $200K Rule” (Quick multifamily value estimator) This rule comes from the same core formula: Property Value = NOI ÷ Cap Rate But we simplify it so the math can be done in your head while touring a property. Step 1 Convert Rent Increase ...

    • The Equity Harvest Window What It Means

      The Equity Harvest Window What It Means The Equity Harvest Window is the point when: The property value has increased significantly Income (NOI) has increased Lenders are comfortable refinancing You can pull out the most cash safely That is when you ...

    • “When ‘Instant Equity’ Is a Trap: How Bad DSCR Kills Deals Before They Start”

      “When ‘Instant Equity’ Is a Trap: How Bad DSCR Kills Deals Before They Start” By Jai Thompson Who I Am (So You Know the Lens) I manage a private equity platform deploying 13–18 million per quarter across multiple real estate asset classes. Our model ...

    • The 10 Percent Rule: How I Instantly Value Multifamily Real Estate Using NOI

      The 10 Percent Rule: How I Instantly Value Multifamily Real Estate Using NOI Written by Jai Thompson I manage a private equity platform deploying 13 to 18 million dollars per quarter across multiple real estate asset classes. Our model is ...