50% rule

[Michael Baradell]

Hey guys!! Rookie question here. Can someone give me a breakdown of the 50% rule using this example? I have already calculated it myself, I just want to be sure I am doing it correctly.

Purchase price- $75k

Rehab cost- $10- 15k.

Taxes and insurance- $300 month

Minimum potential rent- $1100-$1300

Other info:

New roof, new a/c, ARV $125k - $130k

Any insight on the 50% rule or 2% rule will be appreciated.

[J Scott]

Quick video tutorial of the 50% Rule:

The 50% Rule - Video Tutorial