The 2% rule in the Philadelphia Area

[Yasmin Mohamed]

I have been listening to several podcasts to prepare me to purchase my first rental property. I am stuck because I don't know what is a good deal. I heard a couple of times about the 2% rule but I am having a hard time finding a deal that will get be 2% of my purchase price. I am currently looking in the Philadelphia Area. Should I change and focus on a different location?

[Ali Boone]

Hi Yasmin! Well, no, not necessarily. Philly can be great for cash flow. If you leave Philly in search of the 2% rule, you'll be looking for a long time. 

Here's some information to consider about the 2% rule:

https://www.biggerpockets.com/renewsblog/2-percent...

Hope those help. The biggest thing to do before you buy a rental property at this point is to learn "what is a good deal". You specifically say you don't know what one is. If you don't figure that out, who knows what you might end up buying. 

The biggest thing, first, is the numbers. You must know how to run them (and so you can do away with "rules"). 

https://www.biggerpockets.com/renewsblog/2013/01/1...

Then after the numbers, there are other considerations. 

https://www.biggerpockets.com/renewsblog/2014/08/2...

A little information overload, but hopefully it gets you started. You are lucky to live in a market that can actually cash flow, so no real reason to go outside your local area if you don't have to. Philly is a great market. You can't buy in just any area there, it needs to be a little more strategic, but you can buy there and it make sense.