What Is Cost Per Door?
Cost per door = Purchase Price ÷ Number of Units. A $960,000 8-plex = $120,000 per door. A $600,000 6-plex = $100,000 per door. It's a screening metric—Memphis might run $60,000–$80,000 per door for Class C; Denver might run $150,000–$200,000. Use it to compare similar properties in the same market or to spot outliers. It doesn't replace cap rate or NOI—a $100,000/door property with $8,000/unit NOI is different from one with $6,000/unit. But for quick filtering, cost per door is useful.
Cost per door is the total purchase price divided by the number of units—a quick metric to compare multifamily properties. A $1.2M 12-unit = $100,000 per door.
At a Glance
- What it is: Purchase price ÷ number of units
- Why it matters: Quick comparison across multifamily deals
- Market variation: Memphis $60–80K/door; Denver $150–200K/door; coastal $200–400K/door
- Limitation: Ignores NOI, condition, and operating expenses
Cost Per Door = Total Purchase Price / Number of Units
How It Works
The math. Total purchase price ÷ unit count. A $1.2M 12-unit = $100,000 per door. A $2.4M 12-unit = $200,000 per door. Same unit count, double the price—different markets, condition, or rent.
Market benchmarks. Cost per door varies wildly by market. Class C in Cleveland: $40,000–$60,000. Class B in Indianapolis: $80,000–$120,000. Class A in Denver: $180,000–$250,000. Know your market before you judge.
Use case. Screening. A broker sends 20 deals. You sort by cost per door. The $50,000/door 8-plex in Memphis might be a value-add; the $120,000/door 8-plex in the same market might be stabilized. You dig into both. Cost per door is a filter—not a decision metric.
Cost per door vs. cost per unit. Cost per door = purchase price only. Cost per unit can include closing costs and rehab costs—total acquisition cost. For flips or value-add, cost per unit is more accurate.
Real-World Example
Columbus multifamily. You're comparing three 8-plexes. Deal A: $720,000 = $90,000/door. Deal B: $880,000 = $110,000/door. Deal C: $640,000 = $80,000/door. Deal C is cheapest per door—but it needs $120,000 in rehab. Cost per unit (all-in) = ($640,000 + $120,000) ÷ 8 = $95,000. Deal A is $90,000/door, stabilized. Deal B is $110,000/door, Class A finishes. Cost per door got you in the ballpark; cap rate and NOI decide the winner. Deal A: 6.8% cap. Deal B: 5.2% cap. Deal C: 7.5% cap after rehab. You go with C—value-add, higher cap rate, and cost per unit still reasonable.
Pros & Cons
- Fast—one number to compare
- Unit-normalized—apples to apples across different unit counts
- Market benchmark—know what's typical for your target market
- Screening tool—filter before deep analysis
- Ignores NOI and cap rate—$100K/door can be 4% or 8% cap
- Ignores condition—$80K/door with $40K/unit rehab ≠ $80K/door stabilized
- Ignores operating expenses—two $100K/door properties can have very different cash flow
- Purchase price only—doesn't include closing costs or rehab
Watch Out
- Cheapest isn't best: $60,000/door in a declining neighborhood with 15% vacancy rate may be worse than $90,000/door in a stable area. Cost per door is a filter, not a buy signal.
- Value-add distortion: A $70,000/door property needing $25,000/unit rehab has $95,000 cost per unit. Use all-in cost for value-add.
- Market mix: Don't compare Memphis cost per door to San Francisco. Different markets, different norms.
- Ignoring gross rent multiplier: Cost per door ÷ rent per door = GRM. Two $100K/door properties: one rents for $1,000, one for $1,200. Different GRM, different value.
Ask an Investor
The Takeaway
Cost per door = Purchase Price ÷ Number of Units. Use it to screen multifamily deals and compare across markets. Memphis $60–80K, Denver $150–200K. It's a filter—not a replacement for cap rate or NOI. For value-add, use cost per unit (all-in) instead.