Real estate investors can use the Golden Rule of 20%, also known as the “20% Rule,” to help them determine whether an investment property is worth pursuing. The 20% Rule is a simple and effective way to evaluate potential real estate investments. This helps protect the investor from overextending themselves and taking on too much risk.

The Rule of 20% can be applied in various ways depending on the investor's goals and objectives. For instance, the Rule could be used to help calculate the minimum down payment required for an investment property or even to help determine if a certain type of rental property is worth the time and effort.

Another way to use the 20% Rule when evaluating an investment property is to compare it to similar properties on the market. For example, if two similar properties are for sale and one has a price tag of $100,000 and the other has a price tag of $125,000, the Rule of 20% would suggest that the more expensive property is not worth considering. This is because the 20% Rule states that an investment property should always be at least 20% less than its market value.

The 20% Rule is a great tool for real estate investors to use when evaluating potential investments, as it helps protect them from making risky or overvalued investments. However, the Rule should not be considered a guarantee of a successful outcome and it is important to use other methods of evaluation such as market research and financial analysis when making an investment decision. By combining the 20% Rule with other forms of due diligence, investors can make more informed decisions about their potential real estate investments.

You should also keep in mind that the 20%Rule is only a guideline and it is possible to find success even with properties that do not meet the criteria. Ultimately, you should use all available information when making decisions about potential real estate investments. This includes market research, financial analysis, and your own judgment based on experience and intuition. By using all these sources of information, you can ensure that your real estate investments are well-informed.

Remember that real estate investing involves risk and there is no guarantee of success. The 20% Rule is a helpful guideline to follow when evaluating potential investments but should not be considered a guarantee of success. Instead, it should be used as part of the overall process when making decisions about real estate investments and combined with other forms of due diligence to ensure the best outcome possible.

Hope this helps! For more real estate advice and comprehensive coaching, get in touch with Bud Evans Consulting. All the best!