2% rule is bull

161 Replies

I cant find a single property that I would be able to buy in a half decent neighborhood utilizing the 2% rule. I looked in almost all of florida. Maybe a trailer park home, but then again, the land rental fee or whatever will kill any positive cash flow...

Show me a real Zillow example from the last 6 months.

@Martin S.  You're right, there's practically no areas of Florida that produce 2%, maybe in some of the northern and rural regions.  The best you'll find is about 1.5%.  To get 2%, need to look at the mid west in 'C' or 'D' areas.  

Is getting 2% monthly important to you? Compromise on neighborhood. Look in Ohio. Stop lookng on MLS, that is retail.

I buy in FL and have no problem getting 2% and I can get 4% in low income areas (that I still feel safe going into).  Keep looking.  You aren't going to get new construction at that price but you can get good rentals in middle class areas.  

Originally posted by @Patrick L.:

I buy in FL and have no problem getting 2% and I can get 4% in low income areas (that I still feel safe going into).  Keep looking.  You aren't going to get new construction at that price but you can get good rentals in middle class areas.  

 Similar in parts of Texas. 

No problem getting 2% in FL, he even gets 4%, lol. WHERE? Show proof, address, Zillow link, etc...

Don't forget I did mention "half decent neighborhood" don't show me some meth lab house or crack house...

So HOW do I look, other than on MLS? Cuz me and 99% of the world doesn't know how to search other than MLS listed properties, ok maybe there are some on craigslist, who knows...

I have cash NOW, I will buy a 4% house (which you would even be comfortable buying) in any decent neighborhood in FL. Show me!!!

I can buy 5-10 houses like that now. Maybe more.

Originally posted by @Martin S:

So HOW do I look, other than on MLS? Cuz me and 99% of the world doesn't know how to search other than MLS listed properties, ok maybe there are some on craigslist, who knows...

 Marketing. Wholesalers. Driving for dollars. Be creative. 

Have you looked in Palm Bay? 2% is possible there. Not beautiful stuff but there are decent neighborhoods with reasonable priced properties. Just check them out first.

The 2% rule isn't set in stone it's a "rule of thumb" that some people use. Some people go with 1.5% some people go with 1% just all depends on your area and what you're comfortable with. You can't have it all so you're going to have to sacrifice somewhere. If you want a better neighborhood with less headaches then you're probably going to sacrifice on the cashflow. It's risk vs reward.

Market directly to property owners (hint: search "yellow letters"), form relationships with wholesalers, network in your farm areas, attend REIA's, and reach out to BP members in your farm area. I've purchased less than 15% of mine from MLS.

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When people want to sell their house, they go to a real estate agent. How is marketing going to help me? I've always saw those "We Buy Houses, for CASH" signs as BS, just dirt bags trying to rip people off. I'm sure 99.9% of people willing to sell their house would list it on MLS. Wholesalers are probably those dirt bags, trying to rip the next person off, yes I've gotten a list of properties from a wholesaler, and I could have done much better on the MLS, their prices were just stupid.

Whats driving for dollars?

Originally posted by @Martin S:

No problem getting 2% in FL, he even gets 4%, lol. WHERE? Show proof, address, Zillow link, etc...

Don't forget I did mention "half decent neighborhood" don't show me some meth lab house or crack house...

 I've posted several of my recent properties in this thread.  It'll also show you nice properties in other areas and just about every property in that thread should exceed the 2% rule. 

http://www.biggerpockets.com/forums/61-innovative-strategies/topics/115738-sub-30k---property-pictures

I'm not going to out every property I've ever purchased.  I do this for a living and if you want to make money it's going to require some work on your part, more than just looking on realtor.com. 

Originally posted by @Martin S:

No problem getting 2% in FL, he even gets 4%, lol. WHERE? Show proof, address, Zillow link, etc...

Don't forget I did mention "half decent neighborhood" don't show me some meth lab house or crack house...

 Wow, good luck getting someone to spoonfeed you what you're looking for....If 2% properties don't exist like you say then maybe investing isn't for you. 

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I was informed by my real estate agent that investors came into Charlotte from California over a year ago and were looking for 1% properties. This tells me that if I want 1% or better, I can't be looking on the MLS where everyone else is. I'm sure there are 2% properties out there, I just need to get to them before they are public knowledge to other investors in my area.

Side note, I wish I had the cash to purchase 5-10 properties, if I did I'd be trying to build relationships with people here who could help guide me in the direction to find a use for the $. Just a thought..

Originally posted by @Martin S:

When people want to sell their house, they go to a real estate agent. How is marketing going to help me? I've always saw those "We Buy Houses, for CASH" signs as BS, just dirt bags trying to rip people off. I'm sure 99.9% of people willing to sell their house would list it on MLS. Wholesalers are probably those dirt bags, trying to rip the next person off, yes I've gotten a list of properties from a wholesaler, and I could have done much better on the MLS, their prices were just stupid.

Whats driving for dollars?

People wanting to sell a house for RETAIL list on MLS. People NEEDING to sell a house with issues sell to wholesalers, flippers and investors.

And FYI wholesalers come in all types, just like any other profession. Some are skilled, and provide value, some don't. Some know what they are doing, some don't. Many threads about that.

if you have the cash to buy 5-10 properties give me a call and i will help you buy your 10 properties here in the columbus area get your 2% and i will hook you up with an amazing property management company. But i will tell you that you will be buying rehab properties fixing them and then renting them out. just saying....

@Martin S.  

I am assuming that you are not meaning to come across the way it seems in your posts.  I have found many 2-4% deals over the years mainly in smaller towns in Texas but it takes some research and work to get it done.  If is was as easy as writing a check....everyone would be doing it.  Well maybe not cause most people are broke !

People on BP are not the 99.9% that "just list on the MLS" There is a ton of great resources on this site and some great advise as well.

I agree with it being hard to find the 2% rule in a non crime-ridden area or trailer park. I have been searching daily for single family and multi's for about the last 2 months and have seen 2% only on properties that something seemed a bit off with them. (large 5,000 SF house supposedly made into 12 units ..... just seem like something I should avoid)

the best Ive been able to come up with is around 1.6%, providing I can get someone to take a 15% below asking offer (recent example, didnt work either). 

but again, i guess with 2 months I just simply havent been in the search long enough. im hopeful something will pop up that fits. surely by 3 or 4 months I should be able to find something dont you think? how long does it take you guys to find a rental deal typically?

Take a look at his post history.  This isn't his first ridiculous thread. 

Account Closed your memes you've been posting are awesome. Keep up the good work. I particularly enjoyed your Oprah the other night. 

Didnt read all the comments.

Midwest.

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