But my husband and I argue about this kind of stuff all the time.

You can argue that is a bad assumption, but using that assumption it is 6 of one half a dozen of the other.Mathematically finding a 2% property is the same as using the 50% rule to estimate annual NOI and dividing by a 12% Cap rate.Example (on the level of property that will often meet the 2% rule)$500 monthly rent says you buy it at $25,000 to meet the 2% rule.Take the same place and assume the 50% rule which gives you $250 a month or $3,000 a year.  

I've also had a couple of people try to tell me that my model won't work in X area and rather than argue about locations and wrestle with doubt, I now prefer to just quietly handle my business and fill my units from my waiting list of tenants ;) Generally speaking though, there are some great deals to be had in Michigan/suburban Detroit and there are a few solid $50k deals left in Atlanta too (much harder to find).

Now, argue your method is actually better based on the math instead of tilting the playing field irrationally.

And YES, there are these people out there, litigious people who look for opportunities to exploit their protected class for financial gain.For the record (and to avoid some of the BP posters who love to argue a cause, no matter how irrelevant to the topic at hand), I am not taking a position one way or another. 

Now you might argue that's low but I think too many people get caught up in BP formulas and price themselves right out of lucrative markets.

Hard to argue with that.

I would strongly argue that a diversified investment portfolio made up of real estate assets, index mutual funds, and liquid cash with low debt is the best long term strategy.  

If a person has no W2 income but owns several companies than the IRS could still argue that the person does not meet all of the criteria for being a real estate profession. 

It could also be argued that the inspector should have tested the unit for any leaks and notified the buyer.