#259 - If the 1% rule doesn't work in your market, try this instead

Real Estate Investing with Coach Carson

Chad Carson

Business, Investing

4.9 • 613 Ratings

🗓️ 21 October 2022

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

Episode #259 - Learn 5 ways you can still make real estate investing work even when the one percent rule doesn't work in your market.

COMPANION ARTICLE/SHOW NOTES: https://www.coachcarson.com/one-percent-rule-does-not-work/

Transcript

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0:00.0	You've been out looking at properties and nothing meets the 1% rule in your location.
0:05.0	Not even close.
0:06.0	Should you throw up your hands and give up and say, I can't be a real estate investor where I live?
0:11.0	Or is it possible that there's some changes you can make to how you're doing things to still put deals together?
0:17.0	In this video, I'm going to share five specific changes that I suggest you consider and you start making if you want to put more deals together. In this video, I'm going to share five specific changes that I suggest you consider and
0:22.7	you start making if you want to put more deals together.
0:24.9	If we haven't met yet, my name is Chad Carson.
0:35.5	You can also call me Coach, and this channel is all about helping you get out of the financial grind so you can do more of what matters. In these Ask Coach episodes are where I do my best to answer your burning questions about personal finance and real estate investing. For today's question, I could have picked from dozens and dozens of emails and comments that I've received, but they all said something like the 1% rule is impossible
0:54.6	or is very unrealistic or there are just no properties in my area that meet the 1% rule.
0:59.9	So thank you for all of your comments. Please keep making them on YouTube or you can send me
1:03.7	an email at podcast at coach carson.com if you want them to be featured in a future episode.
1:09.1	I'm going to get to the five solutions or changes you
1:11.5	can make, but first, I want to do a quick recap of what the 1% rule is and why it even matters.
1:17.3	The 1% rule says that the rent of your investment property should equal about 1% of your
1:22.0	total purchase price. So if, for example, you buy a property for $250,000, the rent on that property to meet the 1%
1:29.7	rule should be about $2,500 per month.
1:33.8	I personally recommend also adding any repairs that you do to the property to that total
1:37.9	purchase price.
1:39.1	So let's say you do $25,000 in repairs.
1:41.7	In addition to that $250,000 purchase price, your total cost is about $275,000.
1:47.6	And to meet the 1% rule, you'd want the rent to be $2,750. But why does the 1% rule even matter?
1:55.1	It matters because it's a very rough indicator of cash flow. So it's used as a goal or a rule of thumb such that if your
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