3% Rule Possibilty

[James Syed]

Hi BP, 

I have noticed a lot of discussion on 2% rule here at BP. I am wondering if it's possible to get even 3%. 

Is there anyone getting 3%? I am curious to see if it's achievable. To be more precise, we are not talking about D areas (war zones) or run down (trash) properties. 

Any response it appreciated.

[Dawn Anastasi]

In order to do the calculation, I always include rehab.

Example 1 - I purchased a property for $23,000 and I had to put about $1,600 into it for rehab and it rented at $875/month.

$875/($23,000 + $1600) = 3.56%

Example 2 - I purchased a property for $21,000 and had to put about $2,500 into it.  It rented for $750/month.

$750/($21,000 + $2500) = 3.19%

Example 3 - I purchased a property for $16,000 and had to do $200 in repairs to it. $100 was for a handyman and $100 was for materials. It rented at $725/month but subtracting out the HOA the net rent is $536.50/month.

$536.50/($16,000 + $200) = 3.31%