Ask Justin Show | The 1% Rule For Apartment Investing
In today's episode of the Ask Justin Show, we are going to be talking about the 1% rule when looking at possible apartments and multi-family to purchase as a value add and buy and hold opportunity. The Brennan Pohle Group invests specifically in apartments throughout the US by purchasing C-type properties and renovating them to B-type properties. If you or someone you know is looking to expand your investment options and portfolio, please don't hesitate to reach we are here as your real estate resource!
The rule of thumb for apartment investing is the 1% rule. This rule is used to calculate the average projected rent at a 10 multiple. So the ARP needs to be greater than 1% of the price per unit before rehab. So lets say we are buying it at $80,000/door, 1% being $800. The average monthly rent for the properties projected rehab units must be greater than $800. This lets us browse properties on the internet and get a quick calculated estimate on the property's potential before we spend a large amount of time digging into the numbers.
So hope that helps you if you are trying to understand or evaluate multi-unit properties. If you have any questions please don't hesitate to reach out!
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