Evaluating deals for beginners

[Uzoma Onyeije]

Uzoma here. Just getting started. Interested in using a buy and hold strategy for multifamily units. I am having difficulty finding anything in Washington DC in good neighborhoods that meets the 1% test (monthly rent should be at least 1% of sales price). I have been advised to either come up with a new method of evaluating deals or invest in a less affluent area. I don't want to change my target area. Any thoughts on a more flexible way to evaluate deals that still leaves me in the black? Thanks.

[Jay Jasunas]

@Uzoma Onyeije

The 1% rule is very hard to achieve in good neighborhoods with good housing stock. I invest in A neighborhoods with A schools and do not get close to the 1% rule. I do cash flow positive a good amount each month due to higher quality tenants and less maintenance expenses required on the property.

These better houses also tend to appreciate faster than the overall market. Hope this helps.