I can say that after 5 years of ownership, my SoCal rentals cash flow more than my Phoenix rentals were, even though SoCal was purchased around 1% rule and Phoenix rentals were purchased around 2% rule ... rent increases in SoCal were at about twice the rate as Phoenix ... they went up ~40% in that timeframe, and that is for not even the higher end SoCal ... higher end SoCal that I owned doubled rents in same time period (and purchase was ~.75% "rule").

As a general rule, real estate holding LLCs should be created in the same state as the property.

When you talk about the 2% rule (rents should be 2% of purchase price), does it include closing costs, rehab, etc.?

Prices fluctuate rapidly as do levels of coverage. (5) Maintenance and CapEx - Typically, they say you should budget 3% to 5% for each (as a % of rent) but that is a bit of a silly rule. Rents

-You can get in with very little money down with an FHA or 203K loan-Rents in these markets are for the most part very high  -You can argue that most of these properties don't hit the 1% rule, but with small multi-families you end up coming pretty close to it especially if there's a basement with a separate entrance-Properties with separate electric, gas or water meters can make it a lot easier to house hack even if the monthly rents don't hit the 1% rule-Renting by the rooms could be a great way to make it so the rent from your tenants cover your entire mortgage payment or even cash flow a little-Rent increases over time so your rent will eventually hit the 1% rule for your property-There are 4 wealth generators when investing in Real Estate!  

LOL...I like B ham a lot for turn key... my guys do a great job there for their clients. its a little under the radar and I like the topograhphy of the area so you get some character in the area's and the homes.. lots of bonus sq ft on the day light ranch type homes. yes market is more 65 yo 75 for 750 to 850 rents... 1100 plus rents are going to be more in the 90 to 110 PP range.

Quote from @Paul Britton: If you understand what the "1% rule" really is, his statement would make sense.The 1% rule was designed to be a filter, not a hard-and-fast rule to live by.

Monthly Rent (using www.myrentrates.com) $ 2,800.00 1% Rule (Rent should be 1% of Purchase + Rehab) $ 2,473.00 Does this PASS the 1% Rule?

And certainly none of these answers suggest that an landlord is a fat, complacent ruler of any empire, large or small.  

Jimmy, You have to pay closer attention to the other posts :wink: I think Jon already stated it fairly well: the 2% rule really is only applicable to being useful in a very narrow range of market rents; the $500 figure was used.