70% Rule for Fix and Hold?

[Issa Elkhatib]

Hello,  I was wondering if the the 70% Rule applies to fixing a distressed property and then holding it for rent? If  not,  what is the rule of thumb? 

[Rob Myers]

No one rule of thumb is going to be applicable to every situation.  Run the numbers.  Yes, you want to build in some instant equity when you purchase below market and rehab, but the cashflow has to make sense as well if you are going to hold it.  I look at cash on cash return as a pass/fail metric for the single family and duplexes I'm out looking for.