Exceptions to the 1% Rule in Austin?

[Joe Banks]

Hello, I've been searching rental properties in Austin for the past 2 weeks and did not find anything that passes the 1% rule or has a cap rate over 7%. It's more like half of that.

If you were to find a property with a .7% rent ratio and a 4% cap rate, would you make an exception because it's a prime location, if the gross rent covers expenses? I should also note that these are turn key and require no repairs. I want to offer less than the asking price to help the numbers but at best it will bump it to .8% rent ratio and cap rate I don't see it going past 5%. 

The book Millionaire Real Estate Investor says Criteria is non negotiable. But in this hot seller's market, I find it impossible to find something in inventory that passes.

Thank you!

[Jordan Moorhead]

@Joe Banks

Hey Joe, two weeks isn't a lot. It took me 6 months to find a good one in East Austin.

Make offers based on the numbers, make offers and be patient. I haven't seen anything in any markets I watch that work as a rental turnkey so I'd be ready to do at least a little bit of rehab.

Don't buy break even properties unless you're comfortable coming out of pocket. It's not a scalable strategy and you need that cashflow to be safe even if you don't need it for living.