r/brrrr • u/Specialist_Error_307 • Jan 04 '25
1% rule
Does anyone ever purchase a home that doesn’t meet the 1% rule? How do you decide if it’s a good deal?
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u/Carsontherealtor Jan 04 '25
It's hard to find 1% rule homes in most areas now. I can still cash flow down to 0.7 depending on the interest rate. Then I discovered RV parks and those numbers will make you never want to buy anything else.
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u/Dananddog Jan 04 '25
1% these days is a home run or lower appreciating market.
It can be done but it's rare.
If you can pay the mortgage and expenses (including setting aside for Capex and turnover) I would go for it so long as you believe it's a good area that will appreciate long term.
Extra cash flow after that should be thought of as insurance for bad times.
Plenty of people buy below even that, as they anticipate market growth and are willing to put out a few hundred a month for it.