The 1% Rule Isn’t Dead — It Just Moved

There was a time when every investor in America was hunting 1% rental deals like gold.

You know the rule: If a property rents for 1% or more of the purchase price each month, it’s worth a look.

It was the shorthand metric for cash flow, simplicity, and scale.

But over the last few years, headlines screamed the same refrain: "The 1% Rule is Dead."

And sure — if you’re only looking in L.A., Orange County, or the Bay Area, it feels that way. Rising prices, softening rents, and strict lending standards made it harder to find clean numbers.

That’s where many investors gave up.

But the seasoned ones?

They just looked elsewhere.

Right now, I’m seeing smart buyers making the 1% rule work again — in markets like Cleveland, Kansas City, parts of Texas and the Southeast — by combining savvy acquisition strategies with the right loan structure.

Here’s the truth:

You can still hit (or exceed) 1% returns when:

• You’re buying right — think off-market or value-add

• You’re using DSCR or non-QM financing for leverage

• You’re not chasing perfect condition but cash flow potential

• You’re working with lenders who close in 14–21 days — not 45

And if you're thinking, “But I don’t want to buy out of state,” no worries. A lot of local investors are shifting their playbook — cashing out equity, partnering up, or even buying in their own backyard with a creative DPA + rental income strategy if they plan on owning it and living it for a while then renting in the near future.

Here’s the bottom line: The 1% rule isn’t dead — it just moved.

The deals are still there… if you know where to look and how to qualify.

Let’s build your plan around it.