1% Rule in 2026: Most Listings Pass, Few Are Wholesale Deals
69% of Atlanta listings pass the 1% rule at ask, but only a third of the passers with an MAO sit at or under it. What the rule misses, with MAO math.
Then run MAO. Of the Atlanta listings that pass the 1% rule and have an MAO, only 130 of 397 are priced at or under it. The 1% rule said yes to the other 267. A cash buyer would say no.
What the 1% rule is, and what it skips
Monthly rent divided by price. If it's 1% or more, the house passes. A $150,000 house needs $1,500 a month.
It's a fast screen, and that's all it is. It ignores rehab, taxes, insurance, and vacancy. It also uses whatever price you plug in, which is usually the seller's ask. For a wholesaler, ask is the wrong number. Your buyer pays your contract price plus your fee, then pays for the rehab. That all-in number is what the rent has to carry.
How many listings pass in Atlanta, Houston, Milwaukee
DealBeast users ran these listings across three Wholesale Pulse metros between July 28, 2025 and October 6, 2026. Each address counts once. Rent is the DealBeast rent figure on each file, built from rent comps.
| Metro | Listings with ask and rent | Pass 1% at ask | Median rent / ask | Pass 1% and have an MAO | Of those, at or under MAO |
|---|---|---|---|---|---|
| Atlanta, GA | 694 | 477 (68.7%) | 1.16% | 397 | 130 (32.7%) |
| Houston, TX | 37 | 19 (51.4%) | 1.00% | 13 | 5 |
| Milwaukee, WI | 113 | 71 (62.8%) | 1.13% | 64 | 15 (23.4%) |
Houston is a thin sample. Only 37 Houston listings had both an ask and a rent, and 13 passed with an MAO. Read that row as a hint, not a rate.
The Milwaukee line is the one to stare at. Every one of the 15 Milwaukee listings priced at or under MAO also passed the 1% rule. But 49 more passed the 1% rule and still sat over MAO. The rule caught the deals. It also caught more than three times as many houses that aren't.
Worked example (illustrative): Milwaukee
Illustrative only. This uses a plain 70% rule, so it won't match DealBeast's engine MAO in the table line by line.
Take a file close to the Milwaukee medians: ask $149,500, rent $1,640 a month (median on files with an ask), ARV $188,500, rehab $45,000. Your fee is $10,000.
The 1% rule passed a file listed $72,550 above the contract price that works for a 70% buyer and your fee. Now run the 1% rule the way a landlord actually pays, on the all-in number.
Same house. At ask it fails once you add rehab. At your contract price plus fee, it passes. That's the number to pitch a landlord.
Want a better test than 1%? Use NOI and cap rate. Assume 40% of rent goes to taxes, insurance, vacancy, repairs, and management.
A 6% cap on a Milwaukee rental with a $45,000 rehab won't interest most cash landlords. Close to 9% will. If your buyer finances, their lender sizes the loan with DSCR off that same NOI, so the number that matters is still all-in.
Worked example (illustrative): Atlanta
Close to the Atlanta medians: ask $200,000, rent $2,288, ARV $288,000, rehab $41,000, fee $10,000.
Same story. The listing passes at ask, fails all-in, and the 70% math puts your contract price about 25% under ask (24.7%). That lines up with the 23.6% median gap in our how far below asking data.
If your Atlanta landlord takes vouchers, check the rent before you run any of this. HUD's FY2027 Small Area FMRs dropped 3BR rents in all six Atlanta ZIPs we track, by up to $240 a month. The FY2027 Fair Market Rent breakdown has the ZIP list.
How to use the 1% rule as a wholesaler
Use it to sort, never to price. Here's the order that works:
- Pull ARV first. The ARV calculator gets you a defensible number in a minute.
- Get MAO from ARV and rehab, the 70% rule way. That's your price ceiling.
- Run the 1% rule on MAO plus your fee plus rehab. If it passes there, you have a landlord pitch.
- If it only passes at ask, it's a seller's number, not a deal.
FAQ
Does the 1% rule still work in 2026?
As a screen, yes. In DealBeast data, 68.7% of Atlanta listings and 62.8% of Milwaukee listings passed at full ask. But only 32.7% of the Atlanta passers with an MAO were priced at or under it, and 23.4% in Milwaukee. Passing the 1% rule doesn't make it a wholesale deal.
Should the 1% rule use purchase price or all-in cost?
All-in. Add rehab to the price. A Milwaukee file at $149,500 ask and $1,640 rent passes at 1.10%, then fails at 0.84% once you add $45,000 of rehab.
What's a better test than the 1% rule?
Cap rate on all-in cost. On the Milwaukee example, NOI of $11,808 is a 6.07% cap at ask plus rehab and an 8.95% cap at your $76,950 contract price plus $10,000 fee plus rehab ($131,950).
Is Houston different?
Possibly, but the sample is thin. Only 37 Houston listings had an ask and a rent, and the median rent-to-ask ratio was right at 1.00%. Treat it as a direction until more Houston files come in.