How to calculate a good buy and hold deal

[Nicholas Miller]

Hi everyone,

New to the community, active duty stationed in San Diego. My goal is to buy my landlords house using seller financing with the intention of doing a live in flip and then renting it out. 
With doing research and all the BP resources, everyone talks about the 1% rule and the 50% rule when investing in buy and hold properties. I understand that you’ll need to stash away money for capex and maintenance cost, but putting away 10% from a $3,000 rental versus 10% for an $800 rental in the Midwest does not seem comparable. 

So for people investing in more expensive markets, is there a dollar amount you put away monthly versus the percentage when calculating your expenses? Also, is there a maximum reserve amount you reach per property that feels safe like 6 months PITI or something like that.
thanks,

Nick

[Maxwell Ventura]

@Nicholas Miller

6 Months PITI is a good rule of thumb. Have to remember to account for SD's massive appreciation. The 1% rule isn't relevant.

Appreciation & CAP are typically opposite ends of the seesaw. We are at 20% increase median sales price year over year right now. So, if you purchased a $500k house last year you just made $100k.