Author Topic: Is the 1% rule ever coming back?  (Read 8422 times)

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #100 on: April 29, 2019, 07:55:53 PM »
Remember when Japan was buying all the big prestigious buildings in NYC?

Deja vu all over again...

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K-ice

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Re: Is the 1% rule ever coming back?
« Reply #101 on: April 30, 2019, 12:13:20 AM »
You have a property that's cash flow positive even though the rent when you bought it was .3% of the purchase price?

Sorry if I missed this, but what % of purchase price is the monthly rent now?

Is it cash flow positive because you put down a large down payment, or was the bulk of the purchase paid by mortgage? 

I apologize if these are intrusive...just trying to understand.

So to clarify, I guess those first few months at 0.3% were not cash flow positive but we were hamstringed until the owner's son moved out. A below market rental for him for a few months was a condition on closing.  It made getting a mortgage a lot more challenging, as they weren't convinced of our projected income. After him and the woman above him were gone it was at 0.6%. Today it is at 0.9%.

We also self manage and do a lot of DIY. This also wasn't my partner's first rental property so we knew what we were getting into.

As I mentioned the tenants pay all the utilities, which helps keeps other monthly expenses lower. In a larger multi family, say 6 or 8 plex utilities can eat the rent from one entire suite every month. The assessed value was about 2/3 of the sale keeping the taxes lower. Aside from one month to turn over the suites that first time, we have had zero vacancy in 10 years.

I guess what I am trying to say is, yes you can buy something that is not 1%. But spread sheet as may details as possible and be sure it is cash flow positive with realistic projected rents.

soccerluvof4

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Re: Is the 1% rule ever coming back?
« Reply #102 on: April 30, 2019, 05:29:21 AM »
To Waltworks earlier point about not being able to sell half these rental places similar but on a different note I believe this is what is going to be happening in a lot of areas where the house building is going crazy. I would be willing to bet in my area nobody that has a builder build there house is going to ever make money on them when they go to sell and be lucky if they don't lose money. Yes there will be the exception but I am talking most cases.

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #103 on: April 30, 2019, 07:23:56 AM »
We also self manage and do a lot of DIY. This also wasn't my partner's first rental property so we knew what we were getting into.

You need to expense this at some chosen hourly rate (or just use what a management company would charge), not include it as part of your return. Unless you'd like to come manage rentals for me for free...

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theoverlook

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Re: Is the 1% rule ever coming back?
« Reply #104 on: April 30, 2019, 08:11:24 AM »

The "all investments are inflated" idea makes sense. I just haven't been able to predict what will happen.

For example, what if instead of a crash, various investments just slowly deliver poor returns? What if for several decades, interest rates and bonds oscillate between zero and 2% nominal, providing a 1% average loss relative to inflation, while stocks' fluctuation revolves around an average real return of 3%? We wouldn't need a special crash to deliver financial returns far lower than past eras.


Are equities really that inflated? Yes, we've had some amazing returns the last ten years, but prior to that was one of the worst crashes in our lifetimes. It seems to me that the current valuation lines up pretty closely with historical averages. The S&P 500 average total return not adjusted for inflation from 1957 (year it was founded) to 2005 was 10.532%. From 1957 to 2019 was 10.151%. Seems to me that we could see "average" returns from here and it would be about "average." Am I missing something?

Jon Bon

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Re: Is the 1% rule ever coming back?
« Reply #105 on: April 30, 2019, 08:26:35 AM »

The "all investments are inflated" idea makes sense. I just haven't been able to predict what will happen.

For example, what if instead of a crash, various investments just slowly deliver poor returns? What if for several decades, interest rates and bonds oscillate between zero and 2% nominal, providing a 1% average loss relative to inflation, while stocks' fluctuation revolves around an average real return of 3%? We wouldn't need a special crash to deliver financial returns far lower than past eras.


Are equities really that inflated? Yes, we've had some amazing returns the last ten years, but prior to that was one of the worst crashes in our lifetimes. It seems to me that the current valuation lines up pretty closely with historical averages. The S&P 500 average total return not adjusted for inflation from 1957 (year it was founded) to 2005 was 10.532%. From 1957 to 2019 was 10.151%. Seems to me that we could see "average" returns from here and it would be about "average." Am I missing something?

They don't look to be on sale to me.

Source:https://www.multpl.com/shiller-pe




Seadog

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Re: Is the 1% rule ever coming back?
« Reply #106 on: April 30, 2019, 08:57:13 AM »

The "all investments are inflated" idea makes sense. I just haven't been able to predict what will happen.

For example, what if instead of a crash, various investments just slowly deliver poor returns? What if for several decades, interest rates and bonds oscillate between zero and 2% nominal, providing a 1% average loss relative to inflation, while stocks' fluctuation revolves around an average real return of 3%? We wouldn't need a special crash to deliver financial returns far lower than past eras.


Are equities really that inflated? Yes, we've had some amazing returns the last ten years, but prior to that was one of the worst crashes in our lifetimes. It seems to me that the current valuation lines up pretty closely with historical averages. The S&P 500 average total return not adjusted for inflation from 1957 (year it was founded) to 2005 was 10.532%. From 1957 to 2019 was 10.151%. Seems to me that we could see "average" returns from here and it would be about "average." Am I missing something?

They don't look to be on sale to me.

Source:https://www.multpl.com/shiller-pe

Right, certainly not on sale. But are we at the cusp of 1929 where we can expect an 80% crash, or are we in 1995 where we can expect them to advance 50% more?

theoverlook

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Re: Is the 1% rule ever coming back?
« Reply #107 on: April 30, 2019, 09:22:29 AM »

Are equities really that inflated?

They don't look to be on sale to me.

"Not inflated" is not a synonym for "on sale."

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #108 on: April 30, 2019, 10:26:52 AM »
Schiller PE will drop a LOT as the 2009 earnings go away. And it has all kinds of problems with accounting rule changes in the 80s and 90s.

Earnings per share are at all time highs right now too, so there's that.

IMO stocks are only about 15% overvalued. RE is more like 50% most places in the US.

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NorCal

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Re: Is the 1% rule ever coming back?
« Reply #109 on: April 30, 2019, 10:36:43 AM »
I honestly don't know how useful the 1% rule is in this interest rate environment.  I see the value of it in a guideline, but it's no more than that.  You actually have to do a cash-flow analysis these days.

I've considered jumping into RE, but do have a lot of the same concerns shared here.  When I look at my local market (Denver), numbers are very tight.  I could probably find a decent property with a cap rate in the 5.5%ish range.  While that isn't a great return, I'm not convinced the 10 year return on stocks will be any better than that.  They're over-valued in a similar way, it's just less obvious with a casual analysis.

I also think the Denver market still has plenty of room to appreciate.  I could easily see prices appreciating 50%-100% over the next decade.  I don't see this as a national trend though.  If this happens, gains from appreciation will easily outstrip gains from cash flow.

Other factors to consider:
1. The last recession was RE focused.  The next one probably won't be.  A recession similar to the dot-com bust or the 70's oil shock would look a lot different to RE than 2008.

Given the pros and cons, I'm still seeing RE as a decent (if not great) investment.  I would just be sure to build in a greater equity cushion today vs. 5 years ago.

I'd be curious to hear thoughts from more seasoned RE investors on this line of thinking.  I'm admittedly a market observer, and not a market participant.

YttriumNitrate

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Re: Is the 1% rule ever coming back?
« Reply #110 on: April 30, 2019, 10:37:20 AM »
Schiller PE will drop a LOT as the 2009 earnings go away. And it has all kinds of problems with accounting rule changes in the 80s and 90s.
Here's a fun tool you can use to play around with to create a Shiller PE with a custom time period:
https://dqydj.com/shiller-pe-cape-ratio-calculator/

Going to a shorter time period (e.g., 7 years and 7 months) for the Shiller PE doesn't appear to cause much of a drop.


Papa bear

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Re: Is the 1% rule ever coming back?
« Reply #111 on: April 30, 2019, 11:30:57 AM »
I honestly don't know how useful the 1% rule is in this interest rate environment.  I see the value of it in a guideline, but it's no more than that.  You actually have to do a cash-flow analysis these days.

I've considered jumping into RE, but do have a lot of the same concerns shared here.  When I look at my local market (Denver), numbers are very tight.  I could probably find a decent property with a cap rate in the 5.5%ish range.  While that isn't a great return, I'm not convinced the 10 year return on stocks will be any better than that.  They're over-valued in a similar way, it's just less obvious with a casual analysis.

I also think the Denver market still has plenty of room to appreciate.  I could easily see prices appreciating 50%-100% over the next decade.  I don't see this as a national trend though.  If this happens, gains from appreciation will easily outstrip gains from cash flow.

Other factors to consider:
1. The last recession was RE focused.  The next one probably won't be.  A recession similar to the dot-com bust or the 70's oil shock would look a lot different to RE than 2008.

Given the pros and cons, I'm still seeing RE as a decent (if not great) investment.  I would just be sure to build in a greater equity cushion today vs. 5 years ago.

I'd be curious to hear thoughts from more seasoned RE investors on this line of thinking.  I'm admittedly a market observer, and not a market participant.

I’ve always been confused by the Denver appreciation. Sure there are a lot of people moving there, but it’s surrounded by completely usable and buildable land.  Is there something keeping Denver from becoming a Dallas or Houston?  It doesn’t have the issues of being an island or peninsula.  And the mountains are only to the west, and are still more buildable than an ocean or lake.


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NorCal

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Re: Is the 1% rule ever coming back?
« Reply #112 on: April 30, 2019, 11:55:21 AM »
From a geographic standpoint, it's not constrained like the Bay Area.  Denver (but not Boulder) has also avoided the West Coast trap of restricting development.  So housing will continue to be built.  What I see in the local market:

1. There are a lot of gentrifying neighborhoods.  Places that used to be run down are turning into wonderful places to live.  While these areas have seen significant appreciation, there's still room for plenty more.
2.  The available land for building is not in great spots compared to the employment centers (for the most part).  Living somewhere accessible to downtown or Denver Tech Center will become more valuable as population increases and traffic increases.
3.  Local investment in major employment centers continues faster than housing stock can keep pace.  There's a massive new resort/convention center that just opened, the airport is going through a major expansion, and big companies continue to relocate offices here.
4.  Similar to the national trend, home construction is focused on the high-end + downtown luxury apartments.  Adding additional housing stock in the $500K-$1M range won't be a major factor in how a typical rental property is priced.

I could be totally wrong on this one.  I absolutely see the potential for it, but that's no guarantee the appreciation will happen.

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #113 on: April 30, 2019, 02:52:16 PM »
Schiller PE will drop a LOT as the 2009 earnings go away. And it has all kinds of problems with accounting rule changes in the 80s and 90s.
Here's a fun tool you can use to play around with to create a Shiller PE with a custom time period:
https://dqydj.com/shiller-pe-cape-ratio-calculator/

Going to a shorter time period (e.g., 7 years and 7 months) for the Shiller PE doesn't appear to cause much of a drop.

Yes, quite a bit of the drop already happened (CAPE was at around 34 as of a year ago, I think).

My personal feeling is that after accounting for accounting changes and our era of buybacks happening instead of dividends, a "fair value" CAPE would be in the low to mid 20s - not the historical ~15. So stocks are expensive, but not crazy expensive.

RE, on the other hand, I got completely out of last year. Valuations are nutso and EVERYONE has a story about how their neighborhood is different/special... I remember how that turned out last time.

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ChpBstrd

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Re: Is the 1% rule ever coming back?
« Reply #114 on: May 01, 2019, 06:41:43 AM »
Schiller PE will drop a LOT as the 2009 earnings go away. And it has all kinds of problems with accounting rule changes in the 80s and 90s.
Here's a fun tool you can use to play around with to create a Shiller PE with a custom time period:
https://dqydj.com/shiller-pe-cape-ratio-calculator/

Going to a shorter time period (e.g., 7 years and 7 months) for the Shiller PE doesn't appear to cause much of a drop.

Yes, quite a bit of the drop already happened (CAPE was at around 34 as of a year ago, I think).

My personal feeling is that after accounting for accounting changes and our era of buybacks happening instead of dividends, a "fair value" CAPE would be in the low to mid 20s - not the historical ~15. So stocks are expensive, but not crazy expensive.

RE, on the other hand, I got completely out of last year. Valuations are nutso and EVERYONE has a story about how their neighborhood is different/special... I remember how that turned out last time.

-W

Why would doing stock buybacks rather than paying dividends justify a higher PE ratio? The tax disadvantages of dividends wouldn't move the needle that much, right?

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #115 on: May 01, 2019, 07:22:48 AM »

ChpBstrd

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Re: Is the 1% rule ever coming back?
« Reply #116 on: May 02, 2019, 01:05:21 PM »
Buybacks aren't counted the same way at all.

https://seekingalpha.com/article/4086385-shiller-p-e-comparisons-distorted-buybacks

-W

That was an interesting read and thanks for sharing it. However, if I take the current CAPE of 30.74 and, per the author’s advice, chop off 15% to account for buybacks, I still arrive at a historically high 26.13 which implies a sub-4% earnings yield. The author’s points about interest rates and index funds are unconvincing as arguments why stocks are fairly valued even if they are the rationales driving investor behavior. Inflation and interest rates can change rapidly, and the big institutions which control the vast majority of shares have always been able to diversify.

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #117 on: May 02, 2019, 02:07:34 PM »
Buybacks aren't counted the same way at all.

https://seekingalpha.com/article/4086385-shiller-p-e-comparisons-distorted-buybacks

-W

That was an interesting read and thanks for sharing it. However, if I take the current CAPE of 30.74 and, per the author’s advice, chop off 15% to account for buybacks, I still arrive at a historically high 26.13 which implies a sub-4% earnings yield. The author’s points about interest rates and index funds are unconvincing as arguments why stocks are fairly valued even if they are the rationales driving investor behavior. Inflation and interest rates can change rapidly, and the big institutions which control the vast majority of shares have always been able to diversify.

Gotta do another 10% or so for the various accounting changes that have happened since the 1980s, though.

More fun reading:
https://www.philosophicaleconomics.com/2013/12/shiller/

Again, I think stocks are overvalued right now myself. But I don't think they're *crazy* overvalued as the CAPE numbers suggest, because I don't think the CAPE numbers from 1870-1980 or so are directly comparable.

-W

sol

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Re: Is the 1% rule ever coming back?
« Reply #118 on: May 02, 2019, 07:51:49 PM »
Again, I think stocks are overvalued right now myself. But I don't think they're *crazy* overvalued as the CAPE numbers suggest, because I don't think the CAPE numbers from 1870-1980 or so are directly comparable.

Stocks are always valued based on investors' expectations of future earnings compared to today's price, right?  CAPE necessarily uses past earnings, not forward earnings.  That's how we end up in situations like this one, where CAPE is high because future expectations of corporate profits are much higher than the recent actual earnings. 

From one point of view, that should be a good thing.  It means whatever problems we had are resolved and everyone is expecting great things to happen in the future.  The fact that some grumpy internet guys are unhappy that everyone else is happy doesn't mean the market is going to crash.

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #119 on: May 03, 2019, 11:37:09 AM »
Sol, agreed. There's a numerator and a denominator in these measures, which people seem to forget a lot.

If we see wages keep going up, earnings can catch up with prices some. Maybe. Should I say something about a permanently high plateau now? :)

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sol

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Re: Is the 1% rule ever coming back?
« Reply #120 on: May 03, 2019, 11:54:22 AM »
Should I say something about a permanently high plateau now? :)

There's an argument to be made, I think, that the internet has made investing much easier.  There is much more general knowledge out there about stock investing these days, participating in the market is easier than ever, mutual funds have damped the volatility, and awareness of the potential benefits is more widely publicized.  Basically, more people are investing in the market today than ever before, which means more money is being funneled into the markets than ever before.  That drives up prices, which lowers dividend rates and pushes up CAPE ratios.  People are willing to pay more for less, because there is so much loose money sloshing around these days.  America is prosperous, and we like to invest that surplus in our own future.

So yea, maybe CAPE of 30 is just the new normal.  We no longer have to call a broker who goes to the floor and shouts out your buy order looking for a seller.  There are so many more players now, and so much more professional analysis, that the whole investing world just moves faster and gets bigger.

The real threat to this trend, as is always the case in these situations, is a loss of confidence.  We've raised entire generations of Americans who thought the stock market was a sucker's bet, a rigged scam designed to get you to remortgage the farm.  Those folks refused to put their money into capitalism, and their refusal helped keep prices low for a long time.  I guess we could have had a repeat of that failure, after 2009, but millenials still seem just as entranced by the easy money now as my parents were in the 80s.  As far as I can see, confidence in the markets is high and that probably means prices will stay inflated until the bears convince everyone to put their money somewhere else.

tedman

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Re: Is the 1% rule ever coming back?
« Reply #121 on: May 03, 2019, 01:44:14 PM »
Lots of Walt quotes in thread

-W

So if you were a hypothetical 35 year old man who has been saving money in his Roth for years in case he ever saw “that” property but never saw one from 2011-2014 in a local RE area he understood, and now prices just seem outrageous... would you just keep trucking in stocks and just try to be ready next time? Granted I live in NYC, but I can’t seem to decide is it that the older wealthy people I know have real estate beyond their primary and that made them wealthy, or they were wealthy regardless and diversified.

My Roth is my emergency/play/etc fund invested in 100% stocks. I don’t expect things to be perfect, but I feel like I was overly cautious and now around here you’re playing the appreciation gamble.

CM Raymond

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Re: Is the 1% rule ever coming back?
« Reply #122 on: May 06, 2019, 10:42:00 AM »
1% or more rule is alive and well in plenty of markets, just not the ones you are looking in.

That's pretty much what I was thinking.

The capital to buy rental property is concentrated in a handful of metro areas, especially on the coasts.  Everyone wants to have local rentals, so it's not hard to see why returns will be low in those areas.

On the other hand, there are still plenty of places in the rural US and the Rust Belt where a $30-40k SFH rents for $600-1000/mo because there's significant local rental demand and low local supply of capital.  If you're willing to hire an agent to take care of rentals in an underserved market, you can still net well above 1%.  It's just much less likely to happen in a metro that's attracting lots of people with money to invest.

Rustbelter chiming in:

We bought a decent little duplex earlier in the year for $48k.
Rents are $600 for one side (long term tenant--does grass and snow removal) and $700 on the other (including pet fee).

This puts it at 2.71%.

I expect to put $3,000 into the place by the end of the year. Even that puts us at 2.55%

In the final stages of closing on financing for a commercial building: storefront with triplex.
Cost is $71,500.
Three units are totally refurbished and rent for $725 (average).

3.04% without the storefront rented.

Many believe that being close to Pittsburgh, and with new industry moving in, that we will see some significant appreciation over the next decade, but even without it, I'm a happy camper.

Only problem is... deals are getting harder to grab with you out-of-staters jumping into our county!

« Last Edit: May 06, 2019, 10:48:25 AM by CM Raymond »

Enigma

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Re: Is the 1% rule ever coming back?
« Reply #123 on: May 07, 2019, 07:47:42 AM »
Volunteer State (TN) chiming in (1% rule still applies):

I have bought plenty of multiunit (3plx/4plx) around 30-40k per door when rents were around 450-595

Currently the market is still pretty hot but the units are now around 55-65k per door and rents have gone up to around 650-700 per unit.

The thought is being close to Nashville the market is getting hotter.  Many companies appear to be moving to the area.  Maybe more lax ‘Right-To-Work’ laws, no personal state income taxes, and politics have played a role.

Jon Bon

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Re: Is the 1% rule ever coming back?
« Reply #124 on: May 07, 2019, 07:55:28 AM »
Volunteer State (TN) chiming in (1% rule still applies):

I have bought plenty of multiunit (3plx/4plx) around 30-40k per door when rents were around 450-595

Currently the market is still pretty hot but the units are now around 55-65k per door and rents have gone up to around 650-700 per unit.

The thought is being close to Nashville the market is getting hotter.  Many companies appear to be moving to the area.  Maybe more lax ‘Right-To-Work’ laws, no personal state income taxes, and politics have played a role.

What type of neighborhood?

I could probably still find them in C neighborhoods, but that's section 8 with people stealing your appliances when they move out. No thanks. We used to have them in B neighborhoods and A if you looked hard enough.

I know Nashville has been bananas with its growth so I would expect anything in the city to be no where close to 1%?



waltworks

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Re: Is the 1% rule ever coming back?
« Reply #125 on: May 07, 2019, 08:01:40 AM »
For reference, most old-school RE investors will look for 1.5-2% when looking at multifamily, for a variety of reasons.

So if you're getting 1% on multifamily, you are again not getting a great deal compared to historical price/rent ratios.

-W

Enigma

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Re: Is the 1% rule ever coming back?
« Reply #126 on: May 07, 2019, 08:10:18 AM »
What type of neighborhood?
I could probably still find them in C neighborhoods, but that's section 8 with people stealing your appliances when they move out. No thanks. We used to have them in B neighborhoods and A if you looked hard enough.
I know Nashville has been bananas with its growth so I would expect anything in the city to be no where close to 1%?
Clarksville area 40 minutes from Nashville (Clarksville Exits 1 thru 11 of I-24) (Nashville starting at exit 44)
Clarksville was once just a military city (Fort Campbell) but has changed drastically with the base scaling down over the years.  But industry and Nashville's expansion has been boosting the economy almost overnight.

For reference, most old-school RE investors will look for 1.5-2% when looking at multifamily, for a variety of reasons.
So if you're getting 1% on multifamily, you are again not getting a great deal compared to historical price/rent ratios.-W
I have learned that investing in a house vs multiunit are two different animals.  My profit margin is MUCH higher on a multiunit than it is a single-family house (SFH).  The cost savings of fixing one thing are multiplied.  For example, replacing 4 SFH roofs costs more than one roof for a 4-plex.  Even when it comes to replacing appliances/air conditioner/hot water heater that cost is divided over multiple units.

clifp

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Re: Is the 1% rule ever coming back?
« Reply #127 on: Today at 01:19:10 PM »
I have bought 5 places near Independence MO and one place in Bullhead Arizona in the last few years.  Prices ranging for 40K to 110K 3 are duplex and 3 are single family rents range from a low of $550 to a high of $800.  So somewhere between 1.3-1.7%/month. 

I read Mayor Pete book and his mortgage is $450/month.  He's fixed his place up but looking at rentals in South Bend, IN, I bet he could rent it for 1500-2K a month that's a pretty nice return. I found 4 places in South Bend, on the first two pages of Zilliow that were well above the 1% rule.  I was recently on a Costa Rican tour with folks from IA, PA, OH, WI, ID, and rural IL, and TX and everyone of them had real estate that was 1% rule. 

My SWAG (scientific wild ass guess) is that you give find rentals in parts of 30 out of the 50 states. that meet the rule.  Pretty much everything below the Mason-Dixon like excepting VA.  The whole rust belt, small city Texas, except for Austin suburbs and maybe Dallas or Houston suburbs.  The plains states, scattered places in NM, AZ, UT, and NV.  Where I don't think you can find 1% places is the West Coast, New England, and most of the Atlantic states, and most cities with a population over 1 million.  Although I'm far less certain my 1,000,000 population claim.


tralfamadorian

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Re: Is the 1% rule ever coming back?
« Reply #128 on: Today at 01:41:45 PM »
My SWAG (scientific wild ass guess)

I love this.

BicycleB

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Re: Is the 1% rule ever coming back?
« Reply #129 on: Today at 02:28:57 PM »
I have bought 5 places near Independence MO and one place in Bullhead Arizona in the last few years.  Prices ranging for 40K to 110K 3 are duplex and 3 are single family rents range from a low of $550 to a high of $800.  So somewhere between 1.3-1.7%/month. 

I read Mayor Pete book and his mortgage is $450/month.  He's fixed his place up but looking at rentals in South Bend, IN, I bet he could rent it for 1500-2K a month that's a pretty nice return. I found 4 places in South Bend, on the first two pages of Zilliow that were well above the 1% rule.  I was recently on a Costa Rican tour with folks from IA, PA, OH, WI, ID, and rural IL, and TX and everyone of them had real estate that was 1% rule. 

My SWAG (scientific wild ass guess) is that you give find rentals in parts of 30 out of the 50 states. that meet the rule.  Pretty much everything below the Mason-Dixon like excepting VA.  The whole rust belt, small city Texas, except for Austin suburbs and maybe Dallas or Houston suburbs.  The plains states, scattered places in NM, AZ, UT, and NV.  Where I don't think you can find 1% places is the West Coast, New England, and most of the Atlantic states, and most cities with a population over 1 million.  Although I'm far less certain my 1,000,000 population claim.

There are 1% rule properties inside Austin?

tralfamadorian

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Re: Is the 1% rule ever coming back?
« Reply #130 on: Today at 02:53:01 PM »
I have bought 5 places near Independence MO and one place in Bullhead Arizona in the last few years.  Prices ranging for 40K to 110K 3 are duplex and 3 are single family rents range from a low of $550 to a high of $800.  So somewhere between 1.3-1.7%/month. 

I read Mayor Pete book and his mortgage is $450/month.  He's fixed his place up but looking at rentals in South Bend, IN, I bet he could rent it for 1500-2K a month that's a pretty nice return. I found 4 places in South Bend, on the first two pages of Zilliow that were well above the 1% rule.  I was recently on a Costa Rican tour with folks from IA, PA, OH, WI, ID, and rural IL, and TX and everyone of them had real estate that was 1% rule. 

My SWAG (scientific wild ass guess) is that you give find rentals in parts of 30 out of the 50 states. that meet the rule.  Pretty much everything below the Mason-Dixon like excepting VA.  The whole rust belt, small city Texas, except for Austin suburbs and maybe Dallas or Houston suburbs.  The plains states, scattered places in NM, AZ, UT, and NV.  Where I don't think you can find 1% places is the West Coast, New England, and most of the Atlantic states, and most cities with a population over 1 million.  Although I'm far less certain my 1,000,000 population claim.

There are 1% rule properties inside Austin?

Given that google tells me that Austin's population was 950k in 2017, OP most probably counted Austin in the 1mil+ category.

clifp

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Re: Is the 1% rule ever coming back?
« Reply #131 on: Today at 03:27:04 PM »

Given that google tells me that Austin's population was 950k in 2017, OP most probably counted Austin in the 1mil+ category.

Mind you Austin, is the only major Texas city I've never been to, but I'd be shocked if you could find many (any?) 1% rule places there. 

waltworks

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Re: Is the 1% rule ever coming back?
« Reply #132 on: Today at 04:24:52 PM »
There is not 1% rule RE available in UT. Full stop.

-W