Is the 2% rule possible with houses I actually want to own in my market

[Grant P.]

My big dilemma is the 2% rule. I see and hear everyone talking about it, and I am jealous of the ROI they are getting, but I have a few issues with it.

1. I really don't see this being possible in my market, not without dealing with a bad neighborhood/issues that come along with that.

2. I am happy with 1% because I still cash-flow plenty and I'm holding in hot areas that are appreciating quickly, and I typically rehab them to create equity in these places.

I know you can't have everything, and my strategy is different than those that just seek the 2%, but why am I stuck with 1% in a hot market with high rents?

[Joel Owens]

Everybody wants to have the cake and eat it too.

It's all relative to what you are trying to do. If you are trying to take 40k and flip up to quit your day job then you go chasing yield as the money has to grow at a very quick pace.

For that you deal with a bunch of problems and headaches.

If you are pulling down 100k,200k a year etc. at your job what you don't have is time.You are willing to buy something at an 8 or 9 cap in a nice area.You get appreciation and cash flow.

You don't get the druggies,drive by's,and all the other stuff that goes with chasing the extra yield.

Once you factor in all the problems the extra yield is almost a myth in and of itself and the returns that made you buy in a suspect area are not there anyways.

Once my clients know what they will have to accept for the extra yield they say they will take a few percent less.

I know personally I don't want to buy in those low income headache areas.

I value less stress,a fun life,and a more stable property than the extra yield.