Rising prices are crushing my 1% Rule Strategy, Any thoughts ?

[Vince Stanley]

I am a fix and hold investor.  In my market, the prices are going up so fast that I can't seem to make a competitive bid for a property.  I follow the 1% rule where I am willing to spend $100k on a house that rents for $1k/mo.  The houses on the market now are sold within the week and there is either poorly executed flips or fixer-uppers.  The flippers are snatching up the fixer uppers.  I want to add one more rental to my portfolio before August.  Can expect the following:

1) The flippers are buying so they can have something on the market by May?

2) The prices are rising too fast and I should raise my price a bit and hope the rental market catches up? If so, is there any rules of thumb?

3) There are plenty of empty houses in my town, should I be contacting these owners to see if I can get a private deal?

4) Should I build something from scratch?  I there any resources around that I can use to get the financials right?  I can handle the actual construction.

[Jay Hinrichs]

Quote from @Marcus Auerbach:

Don't get too hung up on the 1% rule - it's just a rule of thumb. Keep in mind the 1% rule has been arround when interest rates were double digit. 

I have bought lots of houses that were more in the 0.7% to 0.9 range over the last years and they are all doing great. When you run numbers you'll find that higher price points are a little more tollerant.

And yes, number 3!

 have to factor in rising rents.. what is .07%   5 years from now is 1.2