You'll hear these terms used throughout this site:
Duplex: Residential property with two permitted units
Triplex: Residential property with three permitted units
Fourplex or Quadplex: Residential property with four permitted units
Equity: The difference between the fair market appraised value of your multifamily property and the amount you owe on a mortgage. To calculate simply deduct the mortgage balance from the appraised value.
Sweat Equity: The improvement in value of your duplex due to your labor, maintenance and renovations.
Cap Rate: Cap (or Capitalization) Rate is the ratio of the net operating income to the market value of a property. The net operating income does not include debt or interest.
Gross Rent Multiplier (GRM): The GRM is the ratio of Gross Scheduled Income (GSI) to the market value of the property. This formula does not take any expenses into account - you just divide the market value by the annual rent.