Good deal at less that 2% rule?

Question

Hello Everyone!

I have a question on a property I am seriously considering.

Purchase price would come out to $180,000 ARV would be $195,000 with $10,000 Reno.

Its a 2 unit property and would bring in $1,900.

Monthly expenses come out to $1,385.63 with a cash flow of $514.37.

Financial Info

0.93%2% RULE

$46,000.00TOTAL INITIAL EQUITY

7.89GROSS RENT MULTIPLIER

1.81 / 1.70DEBT COVERAGE RATIO

I believe this is a good deal but lost on the rules...

Etienne Martel · Answer

Hey Zachary,

If I were you, I would try to get the property at a lower price. There isn't a big gap between the current price and the ARV. For our properties, we always keep our rents at least 1% of our ARV's.

Try to keep as little equity out of the property, by refinancing or using other peoples cash for the downpayment.

Happy Holidays & Happy Investing!

Good deal at less that 2% rule?

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