BRRRR Calculator: Need help in analyzing a property to determine if I hit the 1% rule

[Bria LaShee]

Hi I'm new to the BRRR calculator and I'm getting a little confused to know if this is a good deal and whether I will hit the 1% rule. Does anyone know where I can get someone to help me to analyze this property?

[Stuart Udis]

@Bria LaShee Let’s take a step back here. You are buying a single family rental in the 19120 zip code with the intent of leasing this home to a PHA Voucher recipient. What’s the thesis behind this purchase? By this I mean why will this property appreciate? Cash flow alone won’t get you anywhere because the cash flow in section 8 SF homes get wiped away with cap ex and operating expenses and your spreadsheet doesn’t tell the true story, trust me on that. 

19120 is comprised of neighborhoods with relatively weak fundamentals that’s experienced limited appreciation/growth compared to other areas of Philadelphia. This is a casebook study of placing too much focus on the 1% rule which is not at all a good indicator of a properties performance while ignoring the factors that are far more telling.

Unfortunately the 1% rule gets so much attention and so many new investors are trained to look for properties that meet the 1% rule. Quite possibly the worst advice new investors rely on.