The "Rules" in Philadelphia

[Jason Rivera]

Are the 2% rule and 50% rule feasible in Philadelphia? Has anyone been able to apply these rules?

[Igor Messano]

I just posted about my first purchase if you look at my history. The 2% rule did not apply for me in any of the deals I looked at. These were some pretty risky areas and it still didn't work for me. Now the 50% did work although I am not a big fan of it. It takes a lot more effort but when you properly list all of the Capex and such, it usually comes out to a lot less than 50% for me depending on the area. Philly with the flat roofs and smaller properties in the city can have low expenses in comparison to the rent. If your area suddenly becomes popular and rent increase, it doesnt mean your Capex and maintenance will increase unless you do a significant remodel to make it a high end property.