REI Benchmarks

[Andrew Hitchcock]

Hello Bigger Pockets Community!

My name is Drew Hitchcock and I live in the greater Cincinnati Area (Ohio).  I recently picked up the Rental book and am about 60% of the way through it.  My question for the community is regarding benchmarks for Multifamily properties.  I started to evaluate some properties and I am struggling with determining what kind of benchmarks I should be trying to hit?  In the book they mention the 1% and 2% rule as well as a $200/door cashflow mark.  Just trying to gauge how realistic these benchmarks are and what other benchmarks that people use for my area.

Thanks a bunch!

Drew

[Timothy Murphy III]

@Andrew Hitchcock

It can vary (greatly) from market to market or even from property class to property class within the same market. I don't think very many CA investors are finding properties that meet the 2% rule. That said, there are some areas in Cleveland where following the 2% rule would have you drastically overpaying for the property and something more like a 4% or 5% rule is more appropriate. I can't speak intelligently about Cincinnati, but I assume it's going to be similar there to many other cities in the Midwest. I'd expect you'd be able to find some B/C class properties that meet the 2% rule, but check with the locals and see what their experiences have been.