Can you think of any reason why .5% duplexes that negative cash flow are staying on the market only for a few days around here? Is there something that I am missing? Which is why I am asking. I've read most of your posts about investing here in the forum. I get the 1% rule and the 50% estimation both from reading here and BiggerPockets.
I'm thinking maybe investing in NJ may not be the best idea...
You may be right about NJ properties. Property taxes and rent vs purchase price in much of the NE are pretty absurd.
As for being cash flow negative, that all depends on how much cash you are putting into it. I assume that if you pay cash (no financing), you get positive cash flow. Not that I am saying that it is a good idea, but you can get cash flow on almost anything if you don't finance, and there are investors out there who are perfectly willing to do that, even if the return is pretty abysmal.
Many markets may not have any properties that come close to the 1% rule, and there are plenty of buyers that have much looser criteria. Look at Vancouver BC if you want an extreme example of ridiculously high price to rent ratios. There are still plenty of people willing to buy Vancouver properties as rentals, though (e.g. wealthy Chinese nationals trying to park money outside of China). There are also plenty of people who keep all of their money in CDs, people who think gold is the smartest investment, etc. etc.