You need to be a lot more precise than a "rule of thumb." Regarding flipping, you only have half the equation, and the 30% number worked in good times; now it's 35%. The formula is: MAO (maximum allowable offer)=(ARV [after repair value] x 0.65) minus repair costs. So let's say a house, fixed up, would sell for $500,000. That's its ARV. You multiply that by 0.65. You're down to $325,000. Now let's say it costs $20,000 to fix it up. You subtract the $20,000 from $325,000, and the most you can pay for the house is $305,000. That's the formula to "flip" houses.

As for buying and making sure you get your money back after two years--I'm not aware of any such formula. Problem is, two years is two long. Even the formula for flipping wouldn't have worked at the top of the market if you were holding for two years. I know plenty of houses that at the top of the market had an ARV of $500,000. They're now selling at $250,000.

The house flipping formula doesn't take into account appreciation or depreciation. A two year holding period needs to take those into account. But there's no way of knowing.

So, you have to make assumptions. If you assume the market will stay flat, then you have to buy cheap enough now to cover all your transaction costs going in, plus your sales costs going out. It'll cost about 10% to sell the house--maybe a tiny bit less. And it'll cost you a few percent going in. So, you ought to buy about 15% or more under market today if you're assuming the market will stay flat and you want your money back in two years.

Similarly, if you think the market will go up 5% a year--so slightly more than 10% in two years--you'd only have to buy at 6%-7% under market. Or if you think the market will decline 5% a year, you'd have to buy at about 25% under market.

Again, those are only rough approximations. But you get the idea.

Hope that helps.

That sounds like good advice but of course no one can "make sure" you get your money back in this market. Carbondale is a good area for investment property though.