How does the 1% rule work, before or after your deposit?

[Nick Stango]

I'm looking at renal properties and I'm using the 1% rule to get a quick estimate on how much I should pay for a property according to what the rents go for in that area. It seems to be a little difficult to find a deal on a property that falls into the 1% rule when I look at the price compared to the rent. Should I be looking at the mortgage amount instead? So if a house is selling for $150,000. and rents for $1,200. per month and I could put $30,000. down, is that considered the 1% rule? $150k - $30k = $120k '/. 1% = $1,200. ???