A Hopefully Non-Provocative 2% Rule Question

[Jake Kucheck]

Not trying to stir up the nest, just looking for an answer.

Obviously in the OC, I never think about the 2% rule. But... starting to look out of state, I was looking to clarify the following:

I know that the 2% rule states that if your monthly rent is 2% of your purchase price, the property has a good chance of cash flowing. My question is- is it supposed to be 2% of your purchase price, or 2% of your purchase price + repairs. Seems like the total acquisition cost (inclusive of repairs) would be a better number for determining your C on C.