2% rule is bull

Buying & Selling Real Estate
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2% rule is bull

Martin S.
Brooklyn, NY · Member since 2014 · 174 posts · 23 votes

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...

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Account Closed
Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
12y
Originally posted by @Martin S.:

Stop with the stupid pictures too... So far I haven't seen a single address or Zillow link...

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  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y

    I'd be interested in something near Blue Mountain Ski area in PA, up to like 30 minutes away by car, in a decent neighborhood..

    My main criteria for buying a house is if I would live there, I'm not even that picky...

    I don't even need a pool, gym, fireplace, etc etc.

    I've swam in the pool of my upscale building condo once over the last 2 years, lol.

    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    The 2% rule cannot be found in all states, or even all areas of all states.  Period.

    I've done it, others have done it.  Those are the areas you want to look for. Check out the "success stories" forum and you will find some. Someone else posted a link to another thread with various properties that met the 2% rule.

    But the 2% rule is not the be-all end-all of real estate investing either.

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  • Jeremy T.
    Investor · Pittsburgh, PA · Member since 2014 · 266 posts · 240 votes
    12y
    Originally posted by @James Wise:

    Didnt read all the comments.

    Midwest.

     Gulley'd

    1Reply
  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    @Account Closed I think demanding info on a forum without any useful contribution from yourself is a great way to lose respect.  Then talking crap about all the people on the forum and still demanding info is just plain hilarious.  If investing was easy everyone would do it.  Do some research yourself, don't expect people you talk crap about to do it for you.  lol

    1Reply
  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    12y

    I'm under the impression that even if @Martin S. found his 2% property, his investment would under-perform the market.

    When people hand you information, you don't learn anything. Take some initiative. Stop bashing people. The majority of people on this forum are very smart and very successful and you have just outcasted yourself from the community. 

    1Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Brandon Hall:

    I'm under the impression that even if @Martin S. found his 2% property, his investment would under-perform the market.

    When people hand you information, you don't learn anything. Take some initiative. Stop bashing people. The majority of people on this forum are very smart and very successful and you have just outcasted yourself from the community. 

    I agree.  I was going to suggest he start his own site at www.smallerpockets.com but our sneaky host owns that site and routes the traffic here.

    5Reply
  • John HornerPro Member
    Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
    12y
    Originally posted by @Martin S.:

    Do these 2% deals just not show up in sales records? Cuz I've been sitting on Zillow since it came to existence, and I do see that some houses sell for really low, but those can be usually attributed to being sold within family or friends or something, as there is no record of them being listed for sale, and anything that was ever listed for sale in a decent neighborhood and not require a complete tear down wouldn't come close to 2%.

    I've searched, FL, CT, PA, NJ, NYC area, NC...

    Martin, these are off-market deals like the ones I buy. We create processes and marketing channels (and no, I don't use bandit signs) so that the motivated sellers come to us. They never hit the MLS because they call us, we put them in contract and BUY them before they ever contact a real estate agent. This is why you only see them SOLD after we buy them and never see them FOR SALE.

    So saying that these are "usually attributed to being sold within family and friends or something" is absolutely incorrect.

    1Reply
  • Darrell Shepherd
    Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
    12y
    Fun read. Pretty sure I took offense to the "we buy houses" people thing. WTF? You basically just insulted everybody here. I can guarantee you I could buy at 2% in Sarasota, probably out of MLS, but certainly without too much effort and a little know how. That'd make me a dirtbag trying to rip someone off, though, so no sense in sharing how...
    1Reply
  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y

    So you are telling me that those "We buy Houses" people are all great people? I should run to them when I sell my house? They are going to give me a fair price on my house? They will in no way haggle me, tell me that I would be stupid to list my house on MLS or that they are giving me the best deal I can get?

    Wait lets get back to basics,

    whats the point of wholesaling:

    getting a contract with someone who is desperate to sell or just stupid enough to sell for a low price,

    and then flipping that contract to another person, who may be less stupid than the first person to buy the house for more than the contract.

    what kind of people do that? let me go back to page one and see what I wrote...

    0Reply
  • Jeremy Davis
    Canal Winchester, OH · Member since 2014 · 151 posts · 55 votes
    12y

    Haha @Martin S.  

    Columbus mlx number : 211026400

    List price: 2.5million

    come in at 1.9% with no negotiations. 

    talk them down 150k in price  and you will be at 2% 

    1Reply
  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y

    @Mark Ferguson 

    I wasted a lot of time because of this forum, looking for those 2% deals.

    This forum is plagued with people telling everyone they should be doing 2% deals, and pictures of houses with claims that they were 2% deals. I have yet to come across a single house in a decent neighborhood that would be a 2% house.

    This whole forum is pretty much dedicated to 2%, with 0 evidence of a 2% house in a neighborhood a sane person would want to live in.

    Why would I need to prove myself, shouldn't this forum prove itself for its own credibility? Or is this just one of those RE seminar things where some felon is going to teach people how to get rich when he just got out of jail and is broke?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Martin S. 

      you just described the RE industry as a whole and US commerce by and large.. one needs to sell for more than one paid to create profit. its called capitalism.

    Take a new home builder.. they buy a lot construct a home and sell it to the public and make a profit.. could the buyer of the home buy their own lot and build their own home and cut out the builder profit  Sure they could.. but they don't...

    Your basic flaw is thinking these 1% 2% rules are something you need to follow.. that's just a bunch of baloney there are no rules in a knife fight.. Just what your willing to pay I have never looked at investments using those metrics' I am much simpler.. Is there more coming in that going out.. and or can I sell it for more than I am in it.

    The bandit sign guys run the gamut of humanity from low lifes with no money to those that are successful and everything in between..

    But keep at it enjoy the bantor and the collateral comments that are coming from this thread

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    3Reply
  • Will Porter
    Investor · Houston, TX · Member since 2014 · 116 posts · 41 votes
    12y

    @John Horner this idea of funneling motivated sellers is very interesting. Can you provide a bit more detail about your "processes and marketing channels" -- like a big picture overview? What's the general approach that is working for you?

    0Reply
  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y
    Originally posted by @Jeremy Davis:

    Haha @Martin S.  

    Columbus mlx number : 211026400

    List price: 2.5million

    come in at 1.9% with no negotiations. 

    talk them down 150k in price  and you will be at 2% 

    Ok, almost there. except that its a bad neighborhood.

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y

    @Martin S. 

    Perhaps you should read this article if you want an inkling of this community and the man who built it.

    REI Voice

    0Reply
  • John HornerPro Member
    Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
    12y
    Originally posted by @Will Porter:

    @John Horner this idea of funneling motivated sellers is very interesting. Can you provide a bit more detail about your "processes and marketing channels" -- like a big picture overview? What's the general approach that is working for you?

     That is for a different forum my friend!

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Martin S.:

    @Mark Ferguson 

    I wasted a lot of time because of this forum, looking for those 2% deals.

    This forum is plagued with people telling everyone they should be doing 2% deals, and pictures of houses with claims that they were 2% deals. I have yet to come across a single house in a decent neighborhood that would be a 2% house.

    This whole forum is pretty much dedicated to 2%, with 0 evidence of a 2% house in a neighborhood a sane person would want to live in.

    Why would I need to prove myself, shouldn't this forum prove itself for its own credibility? Or is this just one of those RE seminar things where some felon is going to teach people how to get rich when he just got out of jail and is broke?

    If this forum isn't meeting your expectations, you can exit the same way you entered.

    0Reply
  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y

    @Account Closed 

    Ohh please. Forums are what all forums are. Advertising!

    I'm sorry but I didn't learn much here, I learned a long time ago from books and school.

    Its nice to try to teach people these things, but do you realize this whole forum is all about 2% when there is no real 2% in decent neighborhoods!!!

    0Reply
  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Martin S.:

    @Mark Ferguson 

    I wasted a lot of time because of this forum, looking for those 2% deals.

    This forum is plagued with people telling everyone they should be doing 2% deals, and pictures of houses with claims that they were 2% deals. I have yet to come across a single house in a decent neighborhood that would be a 2% house.

    This whole forum is pretty much dedicated to 2%, with 0 evidence of a 2% house in a neighborhood a sane person would want to live in.

    Why would I need to prove myself, shouldn't this forum prove itself for its own credibility? Or is this just one of those RE seminar things where some felon is going to teach people how to get rich when he just got out of jail and is broke?

     I'll try one more time.  

    If you think researching houses and markets is a waste of time than you are in the wrong business.  Go invest in the stock market.  

    If you took the time to read the forum you would see hundreds of people who invest in rentals without meeting the 2% rule myself included. You would also see many people getting the 2% on rentals as well.  Just because you can't find them doesn't mean they don't exist.  It means you aren't that good at finding deals or your looking in the wrong place if that is what you need.  

    For starters why don't you do the math on these deals to see if the numbers work for you.  If you don't like the 2% rule than figure out what you have to pay to make money, stop depending on other people to tell you how you should invest if you don't like their advice.  Then come on hear complaining ad whining how you can't find anything.  

    I never said you should prove yourself. I said if you want anyone to take you seriously and actually take the time to try and help you, you should not bash them and their forum constantly.  No one owes you anything.  People are on here to help others and share their experiences not bang their head against a wall trying to help a know it all who won't listen to anyone and bashes the entire community.  

    FYI, you are welcome to leave at any time.  

    4Reply
  • Jeremy Davis
    Canal Winchester, OH · Member since 2014 · 151 posts · 55 votes
    12y

    @Martin S. That complex in columbus is in the south western school system... that happens to be a very good school system and in a decent area of town. I know its not like new york where you have 1 million dollar 600sqft condos.... 

    1Reply
  • Jeremy T.
    Investor · Pittsburgh, PA · Member since 2014 · 266 posts · 240 votes
    12y
    Originally posted by @Martin S:

    @Brandon Hall 

    I hope you don't think you are one of the smart people in this "community".

    2Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Martin S.:

    @Account Closed 

    Ohh please. Forums are what all forums are. Advertising!

    I'm sorry but I didn't learn much here, I learned a long time ago from books and school.

    Its nice to try to teach people these things, but do you realize this whole forum is all about 2% when there is no real 2% in decent neighborhoods!!!

    Based on my vote count today, I am assuming the site is all about the funny pictures.

    1Reply
  • Nancy Roth
    Investor · Washington, Washington D.C. · Member since 2012 · 239 posts · 168 votes
    12y

    Cardinal rule in online forums: Don't feed the troll. 

    2Reply
  • Martin S.
    OP
    Brooklyn, NY · Member since 2014 · 174 posts · 23 votes
    12y

    How I wasted my time was looking into thousands of recently sold properties trying to see if someone actually got a 2% deal in a decent neighborhood. No I did not look at million dollar houses. I looked at $100k-$200k areas where rents are usually $1 /sf and taxes are reasonable. I looked mainly in FL, NC, CT and PA.

    What I found is that any decent neighborhood will not come close to 2% in recent sales.

    Decent neighborhoods where I would actually live start at 1% market price.

    The neighborhoods where I would get up and move now are closer to .5% and the prices are 1/2mil and up of course. My 611sf NYC condo is worth double that.

    Why is this 2% a big deal to me.

    All these stupid videos on or from this site, 1/2 of the forum is dedicated to 2%, yet 2% is not possible in a decent neighborhood where a normal person would want to live.

    There is ZERO proof that 2% can be done in a normal neighborhood, not 1 single house recently sold in a decent neighborhood meets this 2% rule. End of story.

    0Reply
  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Nancy Roth:

    Cardinal rule in online forums: Don't feed the troll. 

    I would disagree with that.  I think it is a great time personally. 

    1Reply
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