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Updated over 8 years ago on . Most recent reply
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2% rule
I'm a new investor-really new-as in I've just finished chapter 7 of the Ultimate guide. I have a question about the 2% rule. Why is it that we say rents received from the property equals only 2% of the purchase price instead of multiplying the number of units in the property by the amount of average rents to determine the approximate amount of rents that will be received? Please help me to understand so that I can make an informed purchase decision.
I would like to purchase a small apartment complex with 10 units. The sales price is 250K. Thank you!