California Real Estate Practice Exam 2026 – 400 Free Practice Questions to Pass the Exam

To determine the appropriate monthly gross multiplier, the first step is to understand what a gross monthly multiplier (GMM) is and how it is calculated. The GMM is a number used to estimate the value of an income-producing property based on its gross rental income. It is derived from the formula:

GMM = Sales Price / Monthly Income

In this scenario, the appraiser noted that comparable properties were selling for around $350,000, and the reported income for the building in question is $2,500 per month.

Using the information provided, the monthly gross multiplier can be calculated as follows:

GMM = $350,000 / $2,500

Calculating this gives:

GMM = 140

This result indicates that a monthly gross multiplier of 140 is appropriate based on the sales price of comparable properties relative to their rental income. Therefore, when further evaluations are made, using a multiplier of 140 will align with the market conditions reflected in the recent sales data of the comparable properties. Thus, the answer reflecting the monthly gross multiplier that the appraiser would use in further evaluations is indeed 140, which clarifies the relationship between income and sales prices in that particular market.