1% rule? 50%, rule? Actual 1st year %'s of 22 doors

[CJ M.]

I'm a numbers junkie! I know the rules and %'s in this business can be confusing to new investors (heck I'm still new!), so I thought I would post "actual %'s" from my first "full year/2019." Disclaimer: Every deal, everyone's goals, everyone's systems, everyone's risk tolerances are different, etc., etc., so this certainly isn't a reflection of every market. Anyway, hope it still helps someone.

GENERAL INFO/PORTFOLIO CRITERIA:

- Market: Midwest

- Average property value: $60,000-$65,000

- All properties are leveraged (20-30% avg. equity)

- Average Cashflow and CoC % met my criteria

- Average rent: $800-$900

1% RULE

-  I ended at 1.3% (Based off purchase price and not the amount financed)

50% RULE

- Repairs & Maintenance: 10.6%

- Capex: 7.5%

- Taxes & Insurance: 10.0%

- Admin/Other: 9.9% (includes things like annual registration, inspection fees, appraisals, travel, utilities, office supplies, evictions, attorneys, etc.)

- Property Management: 0% (self-managed)

So looking at the "50%" I would say it's pretty darn close! My actual total expenses came to 38%...but, if 10% was included for property management (since that's part of the 50% rule), the % would go up to 48%...close enough! I look forward to tracking these numbers over time, but for now I hope this helps, and wishing everyone much success in 2020!