Real Estate Rules of Thumb

[James Michels]

I’ve been practicing analyzing deals on sites such as Zillow. Now, I’ve read up on certain rules of thumb in regards to analyzing cash on cash return and cap rates, so I have incorporated these rules of thumb into my analyzing. I would love to hear others’ opinions on these rules. Please give your opinion for each.

The 1% Rule

The 2% Rule

The 50 % Rule

[Jay Hinrichs]

Keep in mind that those are guide lines and you will miss deals if you are thinking it has to be 1%.

1% deal with uber high property tax's is no good.. a .07% deal in a place like Vegas with uber low tax's and running costs can out perform a 1% in snow country with high tax's..  look at all the data.