One percent rule for new investors
On its face it seems pretty difficult to find a property that is going to net you 1% of the purchase price in rent when you are starting out. Just running some numbers in the Little Rock market that would mean for a $150k house (of which there are many 3/2 variety) you need to pull in $1500/mo in rent. That's just tough to do even if you get a property 10-15k under value around 1500 sqft for 135k-ish let's say you are likely in the $1100-1200 rent range based on my research (and experience living here for many years).
I am curious about how realistic it is to target that range. I know you can buy a property in much more distress but then you are eating up a lot more cash upfront to get it rent-ready. If I buy a severely distressed property for 80k that will take 40k to get to $150k ARV and $1100-1200 rent I am in the neighborhood of that 1% number altho at the price of a lot of expense and risk. In that scenario, however, I would be getting a lot of equity in the process. Maybe I am looking at this all wrong? Please advise, thanks!