Help - Thumb rules around the country.

[Adam Dassie]

Hello BP,

I am new to the site and have been reading and listening to podcasts for about 2 week. In that time I keep noticing people mentioning thumb rules they use when looking at properties. I have seen things like the 1% rule, the 50% rule and the 70% rule. I think I sort of grasp the idea of these rules, but I am not sure. 

Is there a forum post I haven't found, a podcast, or some site out there that explains each of these rules? If not, will you please post about one of the rules? If these articles do not already exist I would like to create a thread that brings them into one convenient place for all to learn from.

Also, are there any rules that are more applicable to one geographical area or market area over others?

Thank you to everyone who posts. It will really help me and hopefully at least a few other new people in the market.

[Chris Seveney]

@Adam Dassie - I do not consider these rules, but rule of thumbs. For example the rent should be 1-2% of the sales price, but that fluctuates greatly and in a D neighborhood you can get 2% but in a major city you most likely will not even get 1%. These are guidelines which allow you to early analyze a deal. But everyone has different deal requirements and its best create your own internal rules.