The 8% rule with cash flow?

[David Lee]

I have read in several different forums about the 8% rule but I don't completely understand it. Can anyone give me a good explanation of this? Thanks in advance.

[David J.]

Ok guys let me settle this. If you haven't heard of the 8% rule you haven't been investing long. I dare say living under a rock.

The 8% rule states that only 8% of the things you find on the Inter-web are true. More importantly is the converse of the 8% rule (the 92% rule). Such rule states that 92% of real estate investors have never purchased a piece of real estate other than their primary residence.

This 92% includes all accidental landlords that were victims of the Great Recession whom I have been buying houses from for the past 3 years. It is to these 92% I salute and say buy another 1 or 3 homes that rent for <1% of the purchase price and hire an outstanding property manager that sucks every penny of fake cash flow right out of that gross rent revenue. It is this 92% that will pay for my children's college education and my grandchildren's drug addiction. It is always the second generation that loses the family money.