All Forum Posts by: Scott M Dorau

Thanks Joe V., you sound like a very wise man!

Quote from @Joe Villeneuve:

Quote from @Scott E.:

To answer your question, the 1% rule that you heard David refer to is a "rule" established to do a really quick and rough underwrite of a buy and hold investment deal. It's saying that the gross monthly rent on a deal should be at minimum 1% of the purchase price (for example, a $200,000 property should rent for $2,000 per month)

 ...and, once this is calculated, what do you do with your answer?

Good question, that answer sounds like more of a benchmark than a rule to live by.  The properties I am looking at don't come close to the 1% rule, haha.  Of course the cash flow doesn't come close to matching the down payment in 5 years either.

Thanks so much for answering Scott E.!

Thanks Joe, well stated, good info!

David Greene briefly mentioned the 1% rule for shopping for investment properties.  I am shopping now for my first property, can someone explain this?

I guess I am really trying to find out what the minimum cash flow should be?

Thanks in advance!