The 35% Rule is the First page of the 15 Module "Investors Napkin."

What is the 35% rule?
The 35% rule is a simple but powerful tool to use in determining what your maximum bid price ought to be on any given property.

The 35% rule is a rule of thumb for the amount of expenses incurred on a multi-unit property (2-4units). If you are buying a single family property the rule of thumb is 25%. The expenses included in these assumptions are everything but your mortgage/debt service.

You will need to determine the Fair Market Rent in the area of your property in order to make this formula work. This is easily accomplished by looking in the local newspaper or using the internet to see what similar properties are renting for in the area.

Expenses assumptions in 35% rule (25% for Single Family Home) take into account:

Taxes, Insurance, Water/Sewer, Trash, Electricity, Gas, Oil, Pest, Landscaping, Maintenance, Legal, Accounting, Advertising, Cleaning, Supplies, Automobile, Reserves, etc...

Expense assumptions DO NOT take into account the debt service (mortgage).

Remember this is a general rule that ought to give you an educated guess at what the property ought to worth in that given area. Different scenarios might dramatically increase or lower the actual expenses. This is a general rule.

For complete 6.0 version (15 module) "Investor's Napkin" evaluation software - Click Here

For advanced investors/students contact Bill Becker - 1-800-331-020