All Forum Posts by: David Y.

Ah I see where I missed now! Thank you @Brandon Hall! So since the cap rate is pre-expensed gross rent and the 50% rule stated that 1/2 of the gross rent should be set apart for the expense, I conclude that 2% rule is about 12% CAP. Does this sound closer?

I got it from the formula below:

Capitalization Rate = Yearly Income/Total Value.  So for example, I purchased a property for $100,000 and generated $24,000 per year, my cap rate is 24%.  Let say I purchased another property for $100,000 and generate monthly rent of 2% (2% rule), my yearly rent income is also $24,000.  This is how I gather cap rate 24% = 2% rule property.  Can someone help me to understand if this is correct?  Thanks a bunch!

Does anyone know if 2% rule is the same thing as 24% cap rate?  Thank you so much!

Welcome Andrea! I am a REI investor in the Sugar Land area. Nice to see you here and wish you the best luck in all of your future deals!

Thank you @Rob B.!  Right on!  I totally agree with you.  What I was referring was a single family home tho.  So do you think I should see my sfh and take $250k to buy 5 sfh and cash flow them, and in the meantime rent a nice house for my family?  Is this a better option than sitting on my current sfh and see those equity doing nothing for me?  Appreciate your insight!  :-)

Wow you are right! I was going to find a partner to invest in Indianapolis but I need to reconsider it now...

http://wishtv.com/2014/12/29/2014-indianapolis-mur...

So I wondering if any other experienced investors out there could share your insights on Rent or buy the primary residence property?  I have $250k equity in my primary residence property currently. Should I sell it and use the $250k to buy 5 houses and get positive cash flow for $2000 and rent a comparable house in my area for $3000? I heard that buying the primary residence to live in is the worse form of REI investment, what do you think? Thank you for your insights.

David

Thank you @James DeRoest!  

Hi @Rocio Martinez! Welcome to Biggerpockets!  I use forum to post questions and learn a ton of information.  I use the marketplace to find possible deal and I use the podcast to listen to a lot of valuable knowledge and experience.  Hopefully it will work out for you too! :-)