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Updated over 5 years ago,
BRRRR 1% rule for purchase price? or ARV?
Hi BP!
I have seen one thread about this topic and am still wondering how you determine a property to BRRRR. Do you apply 1% rule for an original purchase price? or purchase price plus rehab cost? or ARV? I know how the strategy works and that 1% rule is just a rule of thumb and it will all depend on your interest rate, closing cost, property tax and amortization period etc. However, if you want cash flow to be positive after refi or even break even, it would be better to look for a property that has potential to raise a rent to meet 1% rule for ARV, right?
What's your criteria on this?? Please share your insight if you don't mind!!
Thank you!!