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Are Real Estate Calculations Any Good? | Grading the 70% Rule, 50% Rule and 2% Rule

6/16/2022

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Real estate investors have made a couple of simple rules for evaluating properties. Of those, the most popular are the 70%, 50% and 2% rules:

- 70% Rule: (After Repair Value x 0.7) - Repairs = Maximum Allowable Offer
- 50% Rule: Gross Operating Income x 0.5 = Gross Operating Expenses (or NOI)
- 2% Rule: Monthly Rent / 0.02 = Maximum Allowable Offer

But are the calculations helpful? Are these rules any good? Well, I'm glad I asked on your behalf. In this video, Phillip and I will tell you the unvarnished (and slightly melodramatic) truth.


Click here to see the whole video!

For more, please subscribe to our YouTube channel.

Also, check out Andrew's Substack: https://andrewsyrios.substack.com/

Check out our other videos:
BRRRR No Longer Works... But This Does | Investing in Real Estate Beyond BRRRR
What Do I Do When a Tenant Doesn't Pay Rent?
How to Find Private Lenders and Refinance BRRRR Deals | Part 5: Bill Syrios Presentation at MAREI
How to Manage Rentals as a Real Estate Investor | Part 4: Phillip Syrios Presentation at MAREI
How to Estimate Rehab Costs and Oversee Contractors | Part 3: Andrew Syrios Presentation at MAREI

How to Find, Evaluate and Acquire Real Estate Deals | Part 2: Andrew Syrios Presentation at MAREIThe Mindset Real Estate Investors Must Master to Succeed | Part 1: Bill Syrios Presentation at MAREI
How to Find a Real Estate Deal with No (or little) Money
Don't Get Discouraged: How to Find Deals in a Super Hot Market
There Is NOT Going to be a Tsunami of Evictions | Eviction Moratorium Ending (Eventually)

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    Andrew Syrios

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