Analyzing deals, 1 percent rule and 50% no longer relevant?

[Scout Askren]

Hello everyone I am looking to purchase my first rental property and I have analyzed many deals. What rules are you guys using to measure if the deal is a winner or not? I have been trying to use 1% rule and 50% rule, and the BP calculator, without a massive down payment I can't get a property to cash flow more than 100 dollars. I have a hard time justifying a loan for $200,000 to cashflow $100 a month. Is there a different metric or rule I should use to gauge if a property is a good investment? Also are these rules no longer relevant?

thanks in advance!

[Greg R.]

The main metric I look at is COC. You'll hear some investors say that you don't find good deals, you make them. Look for value add. Perhaps somewhere where you can turn that $100 a month cash flow into $500 or $1,000 with a little work and some creativity. Look for properties in highly desirable areas that are likely to achieve high levels of appreciation.

Don't get too hung up on all the "rules".