Morris Invest: What is the 1% Rule for Real Estate Investing?

Morris Invest: What is the 1% Rule for Real Estate Investing?

There are many ways to evaluate a real estate deal, but one common method utilized by investors is the 1% Rule. This rule of thumb helps investors determine if their investment will be safe and profitable.

In today's video, the Morris Invest team is discussing everything you need to know about the 1% Rule. We'll give a straightforward definition, and share concrete examples. I’ll discuss my experience with this idea, and how you can use it in your real estate business!

This video is for you if you've ever wondered how to quickly evaluate deals. You'll learn about the 1% Rule for real estate investing, and when it is appropriate. Press play to learn more!

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[fredsalfa]

That is basically 12% Rental Yield. Not many at 12% anywhere around the world. But if you can find something like that go for it. Where I live in Sydney Australia the average is 5%

[slockwood]

Got my first property 11 months ago for 22k rents for 750. Just bought my second property a week ago for 22k it will also rent for 700-750. Both of my properties were found on the MLS. The deals are out there.
I love your content Morris Invest! Your content has helped me take the leap and stop talking about and finally do it!

[adambeets]

Does the 1% rule apply after the 20% down payment or before .

[davidmortensen]

Are you using rental income and cash flow interchangeably? I've always thought cash flow to be total income from a property minus the expenses.

[talatsolaiman]

1% Rule applies on gross rent or after you take 40% for expenses?

[JTforeverL]

He made it very clear at the beginning of the video: if you're looking into buying real state that will appreciate over time and then sell for profit, this channel is not for you. But he has a lot of sound advice on renting and the operational of such. I'll keep watching.

[NoviceExpert]

Is the 1% just above the principle? Before interest, taxes, and insurance?

[trebor]

Not sure if you said it...

But I assume you mean 1% gross?
In other words a $100k property would bring in $1000 a month before expenses?

[ViralRivers]

Is this convo regarding total purchase price and total rent, no factoring in how much cash down or mortgage expenses? I assume so based on no mention of actual investment up front but would like confirmation?

[anthonyi]

What does the 1% represent? Gross Monthly Cash Flow? Net Monthly Cash Flow?

[sheilaarp]

I never find houses that cheap I buy in good neighborhoods and move in ready I rent at market rates

[francestan]

I found it's impossible to meet your 1% rule in Los Angelas area not even in a ghetto neighborhood. Is there a rule for appreciations?

[TheMarinMan]

You keep referring to Cash FLow, without defining that. To me, cash flow is Net Operating Income, minus interest expense if you have a loan on a property. I see that Kevin Jacques made a similar comment a year ago. I think what you mean to say is "Gross Rent", not "Cash Flow" when explaining the rule.

[geminigirl]

another great video to listen to on my way to work! i’m so excited to be getting closer to investing in real estate! i’m at the beginning stages (saving money, working on my credit score, and doing tons of research)! thank you!

[beeenterprise]

I love your videos! The information you provide is very useful and easy to understand. I'm a college student, and many of my professors aren't able to explain things as clear as you can. I'm very appreciative of your channel. Thanks.😊

[jgtdragon]

Wait, cash flow you are talking about is the net after tax, property management, and insurance cost or the monthly rental income?

[raffaeleloconte]

hi from Italy, I totally agree. but I got 1, 5% gross only when i have purchased from foreclosure (forced sales promoted by banks and courts) , never done in "regular" market. it depends on many aspects but i am sure many deals are just out there

[youngbeechnut]

Great material very educational! By far the best teachings I’ve seen on real estate! God bless you and your family.

[Beck-Stein]

With this rule, no one could invest in any major metropolitan city like SF, LA, NYC, Denver, Honolulu, DC, etc.

[brendendel]

Clayton, do you have any videos about financing a rehab on a rental property if you only have enough cash for the down payment? Would you recommend waiting and saving up for the rehab, or are there any conventional lenders that would be willing to work with you at a reasonable rate? I would love to see a video on the various options if you are able. Thank you, and keep making great videos!