1% or 2% rule properties - do they really exist? Another metric?

[Matt Fitzgerald]

Is there another metric besides the 1% or 2% rule, like cash flow or something that can be used to decide on a purchasing a rental property?  For example, I'm eying a 3 unit multifamily that costs $995,000 but the best rent it will bring in in is $6200 (I know this b/c I study the neighborhood & have 3 rental units a few blocks away).   It just doesn't seem possible to find a multifamily in the Boston area that fits the 1% or 2% rule, yet investors gobble them up, even for buy and hold, not just for condo conversions. 

I'm a tenacious person who gets things done, but am stuck on how to expand my portfolio.

I'm glad I found BP, but if I did 4 years ago, it would've caused analysis paralysis then and I wouldn't have made the "naive rookie mistake" of buying my first two properties. I own two, 2 family's and live for free. I'm not even close to the 1% rule, but I'm enjoying freedom from a mortgage and utility payments. 

Thanks in advance for your thoughts and comments!

[Aaron Montague]

@Matt Fitzgerald 

I've been in Boston for 10+ years.  The answer to your question is "no, they don't exist."  If you are in exactly the right place at exactly the right time you can find places that pass the 1% rule.  The key to Boston seems to be guessing the next big neighborhood to go to condos.  If you'd bought 10 units in Fort Hill 10 years ago, you'd be sitting on $5M+ in value right now.  It probably would have cost you less than $1M to buy those places.

Savin Hill is going through that right now. East Boston kicked off a price war 4 years ago.  A 3 family I have been watching was taken off the market and then put back on 100k higher :)  A neighborhood in Roxbury, Dorchester and/or Mattapan will probably be the next big area for condo conversions.  

And yes, if the stars align perfectly for you on a certain day and your checkbook is brimming with cash, there might be 1 Buy and Hold 2% in Boston waiting for you.