Are these rules of thumb realistic?
As I read some of the rules of thumb for real estate investing, I can't help but question if they are realistic or simply wishful thinking.
For example, 70% rule says you should by a house with total cost including rehab cost of 70% after rehab market value. How can that be? Effectively it is like buying a house with 30% discount. Why won't someone else offer to buy it with ONLY 25% discount?
Another rule says you should rent your house for a 2% (net? gross?) monthly return. That means a $200k house needs to rent for at least $4000 a month! That is pure fiction in my world! It is a miracle to rent it for $2000 a month as far as I can tell.
I am curious if other people here think these kind of "Rules" are realistic at all? (Or simply ways successful investors use to snob newbies.)