Contractor · Temecula, CA · Member since 2015 · 190 posts · 36 votes
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. ???
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
11y
It works before. Rents for $1200 on a 150k is less than a 1% deal. But really dig into REAL cash flow. That's what matters. 1% is just a quick starting point.
Contractor · Temecula, CA · Member since 2015 · 190 posts · 36 votes
11y
Thanks @Josh C. if you wouldn't mind could you answer another question? So how much should an investor make on a per door per month basis. I've heard about $200. per door, is this considered a good deal?
Thanks @Josh C. if you wouldn't mind could you answer another question? So how much should an investor make on a per door per month basis. I've heard about $200. per door, is this considered a good deal?
100% dependent on your personal goals, the market, etc. Speaking personally, if my initial pro-forma doesn't show me making at least $150-200/door/month (and that's with super conservative expense assumptions, reserves, interest rates, etc.) I pass without giving it a second thought. May be a bit myopic, but for my goals, it's worked thus-far. Also of note, I don't invest in SFH, period.