70 percent rule on rental property.

[Jay Mat]

Hi I would like to know if the 70 percent rule applies also on rental property's?

[John Warren]

@Jay Mat the 70% rule could be used for rental properties, but you probably will miss a LOT of good deals by focusing only on the equity side of things and not on the cash flow. The 70% rule is meant to give you enough buffer to sell your property and still build in some cushion on a flip. In a lot of markets the 70% rule has been very hard to find for a long time. I literally have not seen a 70% deal here in the Chicago market in good neighborhoods for rentals this past year.