Is there any market that still meets the 1% rule?

[Gagandeep Singh]

I am looking for long-term rental property investment opportunities but none of the cities that are published as best places to invest meet the 1% rule. I looked into Huntsville, AL, and Columbus, OH which are referred to as the best places to buy real estate recently. Am I missing something? 

[Lindsay Davis]

@Gagandeep Singh,

@Gorden Lopes is right about Huntsville—it’s one of the more expensive markets as far as places in Alabama go. If you prefer rentals in B or B+ neighborhoods instead (mainly for higher tenant quality, lower crime rates, and better long-term appreciation potential) and don’t mind broadening your search beyond Huntsville, other more affordable locales in Alabama—like Birmingham, the state’s largest city—could be a good fit.

We’re active in suburbs on the west side of Birmingham like Adamsville, Forestdale, Sylvan Springs, and Pleasant Grove, and a good portion of properties there meet the 1% rule. Specifically, properties in those neighborhoods sell for about $100,000 to $120,000 and can rent for roughly $1,000 to $1,300 per month.

If you’re set on investing in the Huntsville area, there are several lower-cost (yet steadily growing) locales about 25 to 35 miles away—namely Decatur, Athens, and Guntersville—that have properties that meet the 1% rule.

[Spencer Sutton]

I just had a conversation with an investor agent in Jackson, MS who is getting deals within the 1% rule from local wholesalers. These wholesalers used to sell to institutions but now that they're not buying as much, they're searching for retail investors. 

His name is Jim Strickland and he's a broker with Evernest.

[Greg Parker]

We have to fight to find them, but here in Montgomery, we can still be all-in for 110k -120k and get 1,100 - 1,200 rent.

[Crystal Smith]

Quote from @Gagandeep Singh:

I am looking for long-term rental property investment opportunities but none of the cities that are published as best places to invest meet the 1% rule. I looked into Huntsville, AL, and Columbus, OH which are referred to as the best places to buy real estate recently. Am I missing something? 

There are a ton of "Best Place To Invest" reports.  Each of them has different criteria for why someplace is the best.  Very few of the reports use the 1% rule.  I recommend you post a link to the report that showed Huntsville and Columbus.   

[Alecia Loveless]

@Gagandeep Singh With lots of analysis and scrutiny and careful research I am finding deals that are meeting the 1% rule, some that are even meeting 2%.

I’ve been told you can’t really use this metric for deals that have more than 4 units but I don’t see why not. I’m not talking about huge deals with 100+ units where you get lost in economies of scale, but rather deals that have under 10 units.

[Dan Rowley]

It's not difficult to find properties that meet the 1% rule, but be careful what you ask for.  Probably they are older or distressed properties in undesirable neighborhoods certainly they can be found.  But would you want to buy and/or manage them?   

[Kamaldeep Gaheer]

Quote from @Travis Biziorek:

Detroit is the answer. I own 12-doors there.

There are plenty of 1%+ deals in the city but you need to understand the landscape. Please don't just go in and start plucking "deals" off the MLS. This is how folks get burned.

I know Ohio has become extremely popular but it feels a bit too hot for me.

 Hey Travis, which areas in Detroit are you referring to? I live in California but i am familiar with the area since i started my career there.

[Travis Biziorek]

Quote from @Kamaldeep Gaheer:

Quote from @Travis Biziorek:

Detroit is the answer. I own 12-doors there.

There are plenty of 1%+ deals in the city but you need to understand the landscape. Please don't just go in and start plucking "deals" off the MLS. This is how folks get burned.

I know Ohio has become extremely popular but it feels a bit too hot for me.

 Hey Travis, which areas in Detroit are you referring to? I live in California but i am familiar with the area since i started my career there.

That's a massively loaded question with no short/easy answer. 

You can find 1%+ rule deals just about anywhere in Detroit proper but that doesn't mean you should be buying them all. 

Where to buy in Detroit is just as much art as science. It's a massive city and can change drastically from block-to-block. 

If you want some resources I'm happy to send some your way if you DM me.

[Kamaldeep Gaheer]

Travis, When i lived in the area, the urban blight in areas south of 8 mile road was incredible. I am sure a lot has changed since 2008, lol. I mostly stayed in the northern suburbs. would really appreciate resources on ground over there. If you could recommend a realtor and property manager that you trust and like, that would help. Also your recommendations of safe areas with good roi would be appreciated. Thanks

Quote from @Travis Biziorek:

Quote from @Kamaldeep Gaheer:

Quote from @Travis Biziorek:

Detroit is the answer. I own 12-doors there.

There are plenty of 1%+ deals in the city but you need to understand the landscape. Please don't just go in and start plucking "deals" off the MLS. This is how folks get burned.

I know Ohio has become extremely popular but it feels a bit too hot for me.

 Hey Travis, which areas in Detroit are you referring to? I live in California but i am familiar with the area since i started my career there.

That's a massively loaded question with no short/easy answer. 

You can find 1%+ rule deals just about anywhere in Detroit proper but that doesn't mean you should be buying them all. 

Where to buy in Detroit is just as much art as science. It's a massive city and can change drastically from block-to-block. 

If you want some resources I'm happy to send some your way if you DM me.

[Michael Smythe]

@Kamaldeep Gaheer we've got all 183 Detroit Neighborhoods mapped on our website, which may help you better understand how Detroit has/is changed/changing:)

We've also got them all Classified as A, B, C & D, but you have to DM us to get that info.

[Mike H.]

Be careful on the 1% rule. Some areas in the country have property taxes and/or insurance that are far worse than others.  In tennessee I see 300k homes where the taxes are less than 1k a year.  Here in illinois I see 300k houses where the taxes are 10k a year.   Thats a huge difference in cash flow.