Investors look at many deals and buy few. Three rules of thumb help throw out the weak ones in seconds, before you spend an hour on a full analysis.
01The 1% rule (rentals)
Monthly rent should be at least 1% of the price plus repairs. A house bought for $150,000 with $30,000 of repairs should rent for about $1,800 a month. In many expensive metros in 2026 almost nothing passes; investors there accept 0.6–0.8% and rely on appreciation, or look in cheaper counties.
02The 50% rule (rentals)
Roughly half of the rent goes to expenses other than the mortgage: tax, insurance, repairs, vacancy, capital expenses and management. With $1,700 of rent, plan on about $850 of expenses; the other $850 must cover the loan payment for the rental to cash-flow.
03The 70% rule (flips)
A flipper pays at most 70% of the after-repair value minus repairs. With an ARV of $250,000 and $30,000 of repairs, the limit is $145,000. The 30% covers buying and selling costs, holding costs, the loan and the profit. In hot markets buyers stretch to 75–80%.
04Check all three at once
The free rules-of-thumb calculator checks all three with your numbers and tells you which ones pass. If a deal passes, run the full rental cash flow or fix and flip calculator.
05Finding deals that pass
Deals that pass these rules usually come from owners who need to sell: tax-delinquent owners, heirs, tired landlords and vacant houses. LeadCounty finds them in county records every week.
