My 10% Rule: Quick Cashflow Analysis

[Awet Hagos]

I came up with a new way to quickly evaluate if a deal will cashflow.

I call it the 10% Rule: if annual gross revenue is at least 10% of the financed amount (after putting 25% down) then it’ll most likely cashflow.

For example, $100k property (25% down), you do $75k * .10 = $7500 annual revenue (you need at least $625/month to cashflow).

Thoughts?

[Joe Villeneuve]

Guessing on a different level.  Not all properties have the same taxes, insurance, etc...  Where does that come into play here?  Just learn how to actually do analysis, and avoid the shortcuts.  These shortcuts are not time savers, they are deal killers, or rationalization justifiers.  Either way, in the end they waste more time than they save.