2%, 50% & 70% Rule?

[Kelvin Tam]

Hi all,

Yesterday I was listening to one of the Podcast and they said about the rule of thumb for 2% rule, 50% rule and 70% rule in real estate investing.

I tried to run a search in Google but it did not really explain it.

Can anyone kindly explain to me in a simple matter what is all this about?

[Joe Villeneuve]

These are not rules, they are guidelines that will get you into deals that you really have no idea of the exact numbers, and out of deals that you should have gotten in because they give you false negatives.

Just put 5 more minutes into your analysis, and do it right.  Here is what the "rules" really mean:

2% - Your milk isn't as heavy, tastes like the dairy version of light beer, but you can get used to it.

50% - The percentage of people, so I'm told, that drink 2% milk now.

70% - The percentage of increase over the last 5 years for those now drinking 2% milk...again, so I've been told.

Bottom line is this.  Whether you refer to them as rules or guidelines, don't use them.  Just learn how to actually analyze.  It might take you 5 more minutes, and you'll be better off.