1% Rule Based on ARV or Acquisition Cost

[Blake Wight]

Hey Guys!

I had a quick Inquiry about the 1% rule general rule of thumb. In terms of BRRRR it is common to purchase many distressed properties that need to be rehabbed. My question here for a preliminary quick test for cash flow is in regards to whether we base the 1% rule off of the Acquisition cost of the asset (Purchase price, closing cost, rehab, etc.) or the ARV.