Rules of Thumb?

[Jason Fiore]

So I'm familiar with the 50% Rule, the 2% Rule, and that I should be buying at no more than 70% of retail value. Are there any other "standard" rules of thumb that are used by real estate investors?

[Mitch Kronowit]

Originally posted by Jason Fiore:

... I'm guessing that there are some guiding principles the most successful investors on this board use.

Here's mine: Stick to what you know.

IOW, I only buy in areas I'm familiar with, comfortable with, and have a good gut feeling about. Even then, I still perform an exhaustive amount of research to make sure I'm not overlooking something important, such as the quality of the local schools, the city's plans for growth and renovation, employment outlook, and any special tax assessments levied on the property.

I've seen a lot of people buy a house 2,000 miles away, sight unseen, then wonder why they have so many problems. I'm NOT saying you can't be an out-of-state landlord, many do and are quite successful at it, but you have to know what you're doing.