The 1% Rule
The HOPE Method uses the 1% Rule as a simple, non-negotiable filter to eliminate bad real estate deals before emotion, ego, or storytelling can interfere.t least 1% of the total all-in cost (purchase price, renovation, and initial repairs). If a property costs $100,000 all-in, it must be able to rent for at least $1,000 per month now, not someday.
This rule is intentionally conservative. It builds margin for error by assuming that repairs will happen, vacancies will occur, expenses will rise, and unexpected problems will show up. If a deal only works at 0.7% or 0.8%, it has no room for reality and is rejected or restructured. The 1% Rule keeps math honest and prevents investors from talking themselves into fragile assets.