All Forum Posts by: Kevin Jennings

@Kevin Jennings It's still possible to find those 1% deals, but generally off-market. You've got to hit the streets, go to local meet-ups, reach out to everyone you meet and let them know what you're looking for. I've been using an amazing realtor who has helped me find some 1% type deals. Also, househacking is an amazing way to get started and live for "free." I would start by househacking if you're not already doing that. I've been doing it for the past three years and have saved over 27K to use for other deals. Wish you the best!

I agree with everyone's comment. I do want to provide you with a little more information on the topic, so I linked an article below

https://www.fortunebuilders.co...

I hope you find this use and don’t forget that BP also has tools you can use. You are more than welcome to reach out if you have any further questions. Good Luck and go make it happen!

@Kevin Jennings What part of Texas!? I'm originally from Texas, so I completely understand the high property taxes on properties. Right now, I'm not using any specific "rule of thumb" or "metric" to follow by. I'm looking for properties that fit the criteria and I'm diving deep to crunch numbers, so I'm not specifically settling for less cash flow. 

My recommendation is to figure out what your investment goals are first! Then you can narrow it down with certain criteria for the homes such as how many beds, baths, SQFTs, pricing, location, etc... Location is key, if high taxes are a concern try to find specific counties that having much lower taxes than others.

Good luck!

@Kevin Jennings Its hard to find deals that meet the 1% rule on market, even in my market of Louisville, KY which tends to be pretty affordable. Have you considered the BRRRR method? That is how I get my rentals. It builds in equity and helps me exceed the 1% rule every time. Also, get connected with your local wholesalers and other investors. You'll find much better deals off-market. Also, play around with the BiggerPockets calculator if you haven't already. It will help you get more comfortable with what is a deal and what is not.

Hey there! Like what most of everyone stated here, the 1% doesn't work and will not always work for every market out there. It's a general rule of thumb so you can quickly weed out the back properties from the possibilities. Obviously, over the years this specific rule of thumb has become unreliable due to the constant rising of home prices. Always, always, always..! dive deeper, crunch the real numbers to see what the true financials are.

I.E - I'm in the Portland, OR market and the 1% is non-existent here! If I were to always follow that specific metric, I would still be trying to chase my first investment.

Good luck! @Kevin Jennings

No.  There are plenty of people that do not purchase investment properties or stocks because they are trying to time the markets and end up losing out a lot of potential gains over the course of their lifetime.  We may never see another housing crash or a significant drop in prices in the housing market in our lifetimes.  Traditionally over time prices go up.  It is just a matter of working on finding deals.  If this was easy then everyone would do it.

After the subprime mortgage crisis the cost for properties dropped significantly and had taken some time to recover. During that time the "1% rule" was a viable strategy. However, in many markets the cost for properties have risen to the level where the numbers just do not work if you are picking them up at market value. For all my properties in the Atlanta Market, the values of properties have gone up significantly since I started purchasing them several years ago and while they were good investments to buy when I did, they would be horrible investments to buy now at their current values. As others have said, you can find potential deals with off market properties or those that need renovations. Always use your own numbers. You should be able to figure out the PITI on your own, what the fees are for the local PM companies, and also check what the local rents are for properties currently looking for tenants. Don't rely on Zillow or Roofstock or any other website, but definitely use those types of websites as a tool.

Depreciation is not factored into cash flow calculations, you are correct.

It's going to be tough to find a true 1% deal on the market, and it has been for a few years. The key is going off market! Get in touch with your local real estate investor networking groups and start gaining access to off market deals.