You Won't Achieve The 2% Rule Unless You Do THIS!

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You Won't Achieve The 2% Rule Unless You Do THIS!

Рет қаралды 28,373

Күн бұрын

Hey There BP! So many investors use the 1% or 2% rule as a rule of thumb to do a quick evaluation on real estate deals. Everyone seems to strive for the 2% rule, but I have rarely seen many achieve it. It is possible, but you need to invest from a few specific angles to get there. Watch today's video to learn more!
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Пікірлер: 49

@VIVAFPV 5 жыл бұрын

good luck on renting $260k house for $5200/month, or even a half $160k house for $3200/month

@reseller7 5 жыл бұрын

2% is RIDICULOUS!!!!!

@MCrelationz 4 жыл бұрын

@@reseller7 its just a fucking rule you can still become a millionaire with 1%

@reseller7 5 жыл бұрын

2% rule might make sense in some areas ... but in most areas it's PIE IN THE SKY!!! A $200,000 at 2% equates to $4,000 in rent!!! At $250k = $5,000 in rent!!!!! PLEASE!!! 2% rule is saying you'll make 24% for the year!!!! Tell any investor he'll make 24% and they'll lock you up!!! :) I know it's not your rule of thumb!!! A more realistic rule would be 10% -12%/yr .. and that would still be difficult in higher priced properties. Our median price for homes is $750,000. The market still won't support $7500/mth in rent. That would be $90,000/yr. A renter making $180,000/yr would be paying 50% in rent. A rule should FIT the majority of situations. Time to throw out the 2% rule and get a more realistic number that 75% of purchasers can meet without playing with the numbers.

@tadehmirzakhanian893 4 жыл бұрын

thank you, I agree. It seems like these rules work in the high crime cities like Toledo, OH. You basically throw away your money hoping nobody would pick it up.

@tonyj8947 5 жыл бұрын

Excellent material! I think its also good to say that a landlord should not have an emotional attachment to their properties. Its always good to remember your first deal, second deal but keep feelings out of it because its business. In a war zone area, you bought and transformed a dilapidated property into a nice livable home & the tenants wrecked the place beyond recognition. It sucks but don't take it personal, that's the playing field you joined.

@zlatigol9 7 жыл бұрын

I was listening to this home alone with headphones on. The person who closed the door at 13:23 SCARED THE CRAP OUT OF ME!!! Lol. Good stuff as always, Matt.

@weareorigin 6 жыл бұрын

Thanks for the video though. 2% rule is like daydream. Someone selling you a 4-unit house with 100% occupancy and only $100k. Oh, month-to-month tenants who take great care of their new carpets/roof/cabinets too!

@kennedyrentals3645 6 жыл бұрын

Good luck getting at the 2% mark..... A goal of getting to 1.5% is much more realistic. I try not to buy a property if I don't think I can get 1.5% rent. And even if you don't quite hit it, you get an excellent return.

@tadehmirzakhanian893 4 жыл бұрын

Can you share which area you invest in?

@atonvent 6 жыл бұрын

Most properties I see, granted all on MLS, are priced at 1%!

@arunbabu2739 4 жыл бұрын

And you will be lucky to get 1%. 2%..?? Maybe you have to sue the Tennants or blackmail them!

@TheNoodlyAppendage 5 жыл бұрын

how do you classify a property i.e. D or C- ?

@aliciaarroyo6 5 жыл бұрын

I found a duplex in my area that is selling at $50K. I am thinking I can rent out the units at about $500 each. I haven't looked at the property yet... but I am thinking it might need some work hopefully it's minimal so I can make an offer on the place.

@DeRosaGroup 5 жыл бұрын

Sounds like a good deal, good luck!!

@bjbmbc 7 жыл бұрын

If these principles apply to larger properties rather than sfr, why are you using a 4.5% interest? Isn't a commercial loan going to be 6%+, not to mention less than 30 yr amortization?

@DeRosaGroup 7 жыл бұрын

John Michael Cochran you can still get those rates on commercial. we just got quoted 4% on a 30 year amortization for an 18 unit building refinance.

@bjbmbc 7 жыл бұрын

Derosa Group Nice! Does your significant amount of experience play into that though? i.e. Could a first time 15+ unit apartment investor reasonably expect to find this sort of quote?

@DeRosaGroup 7 жыл бұрын

I don't think so, not by much anyway. small community banks are the way to go for these deals, for all investors

@hhhtwins 4 жыл бұрын

Hotels won't charge that much for rent...duh

@YakMotley 6 жыл бұрын

Great information ! Thanks!

@nielstoppenberg3839 6 жыл бұрын

Fantastic stuff - keep it coming, please!

@dridribelo 5 жыл бұрын

Thanks.

@Yaheard32 7 жыл бұрын

Question: is there a website or a way to do research on properties around the area to see what the value of the property is if your trying to do a flip?

@ciphen 3 жыл бұрын

Redfin

@Jennifr1966 Жыл бұрын

My parents bought their home in 1967, sold in 1998 for about $130k. The new owner made some upgrades and sold for about $190k two years ago. That new owner added a few more upgrades, sold it for $270k, 22% ABOVE the average in the area. Why? Because of the improvements! They figured out the home's weaknesses, fixed it, and was able to flip it above the average cost in the area. So remember, you can get above what you might expect just by acting as-if this is your only home and ask what would make it more comfortable to you.

@awurammaparry8073 7 жыл бұрын

Hi LegalLees, l added my 2 children and husband to my LLC. l am a newbie in a real estate investment and do not know much. ls this additional members advisable at this early stage of my business? Please advise, thank you.

@DeRosaGroup 7 жыл бұрын

Awuramma Parry adding your family to your LLC is fine, just remember that the bank may ask them to personally guarantee a loan in rhe future since they are on the company. you should talk to lawyer also, as it depends on your business strategy.

@nestrodamus 5 жыл бұрын

Drink every time Matt winks at the camera!

@EdTowel-ww7yh 6 жыл бұрын

Best landlords for C and D neighborhoods are police officers. For obvious reasons, that kind of clientele will think twice about screwing over their landlord with a gun and a badge.

@KeithJia 4 жыл бұрын

When did he ever get "2"% from!? Are we talking in the middle of nowhere Indiana? It has always been 1% rule... And even that's impossible to get these days.

@MCrelationz 4 жыл бұрын

every investor knows about 2% rule. is it hard to achieve? f*** yeah it is but you can still be very comfortable with a 1% rule.. i agree though it is pretty wild

@joshualee5969 6 жыл бұрын

rent 7000,,, value at 1million for duplex.... is this a good investment????

@DeRosaGroup 6 жыл бұрын

If you are going off the 1% rule, then no...

@joshualee5969 6 жыл бұрын

Derosa Group thank you

@TheSyriosBrothers 3 жыл бұрын

I've been saying the same thing for a long time now, the 2% rule is garbage

@DeRosaGroup 3 жыл бұрын

Thanks! Love your thoughts, your awesome. Here's some free goodies. Just text DEROSA to 66866 for several hours of video training, articles, and other stuff you can't get anywhere else. Enjoy!

@ben-si3dk 4 жыл бұрын

I feel the same way about the 70% rule for flipping, apart from scoring big on a foreclosure that ain’t happening in Phoenix

@deltadigger2833 5 жыл бұрын

2%? Never work here in California we try to get 1.2%

@tadehmirzakhanian893 4 жыл бұрын

where do you get 1.2% in California? I'm guessing in a high desert area like Palmdale, or Palm Springs?

@stevethorne4978 6 жыл бұрын

Good info..Stop winking at the camera its freaking me out.

@jordanroberts7931 3 жыл бұрын

For some of us it may turn us on....

@LosCristeros317 4 жыл бұрын

Who tf would rent a $50,000 house for $1,000 a month? This is absurd....

@tadehmirzakhanian893 4 жыл бұрын

in the hood

@LosCristeros317 4 жыл бұрын

That’s ridiculous... people live in the “hood” because it’s what they can afford. I have a hard time believing anyone would pay $1,000 a month to live in a $50,000 house. The house must be worth more... and if the house is much more than $50,000 then it isn’t much of a “hood.”

@ADKfreeman 4 жыл бұрын

@@LosCristeros317 I get $775 a unit for a 2 family that my all in cost was under $60k. C- neighborhood.

@LosCristeros317 4 жыл бұрын

ADKfreeman if that’s true, it’s a unicorn that will only last in the short term. In the long run people will start getting mortgages and pay less than half what they’re renting for and own the entire property, even with zero credit. Even more assuredly, more and more real estate investors will come in and sweep up property that has the potential to realize such unheard of margins. (Which would then drive prices lower due to the nature of competition) That is unless, a large real estate investor snatches up the entire area in which case he would essentially have a monopoly, but even then it’s hard to believe margins like that will last. Approximately where is the property and are you charging month to month?