Updated about 11 years ago on . Most recent reply
2% Rule Question
My questions is if the 2% rule applies to the initial purchase price or the price after rehab? I recently purchased my first property for $36k after closing costs etc. Rehab is roughly 15k. We are all in for 51k. Expect to get 1,100 in rent. Using the initial purchase price, this property would be 3%. If you use the all in price, this would be 2.1%. Which would be appropriate, and if it is not the latter, can you eplain why the rehab costs would not be factored in?