A duplex in Cleveland. $210,000. Both units rented at $1,850 a month combined. The rent-to-price ratio: 0.88%. The 1% Rule says skip it. But when you run the actual math — cap rate, DSCR, cash flow — the deal produces $267 a month with a 1.27 debt service coverage ratio. The most popular shortcut in real estate just rejected a deal that works.

The problem goes deeper than one deal. The 1% Rule is rate-blind. A $200,000 property at $2,000/month rent passes the rule at every rate — 4%, 5%, 6.38%, 7.5%. But cash flow swings from $684 to $351 a month across that range, and the rule sees no difference. In a market where rates are the single biggest variable, the most common screening tool can't see rates at all.

In this episode of the 5-Minute PRIME Podcast, host Martin Maxwell kills the 1% Rule and introduces the three-number stack that replaces it.

Tune in to learn:

• "The Rate-Blind Screen" — why the 1% Rule can't distinguish between a deal that cash-flows $684/month at 4% rates and the same deal at $351/month with a 7.5% DSCR loan — and why that blindness is fatal in 2026
• "The Three-Number Screen" — Cap Rate, DSCR, and Cash-on-Cash Return: a 90-second screening funnel that accounts for rates, leverage, and actual costs — the replacement for a rule that was invented when rates were 3%
• The Cleveland proof — EP 120's duplex fails the 1% Rule at 0.88% but clears the Three-Number Screen with a 7.1% cap rate and 1.27 DSCR, while a suburban SFR at 0.70% correctly fails both systems at a DSCR of 0.81

Still filtering deals with a rule invented when rates were 3%? Passing on properties that would actually cash-flow at today's numbers?

Subscribe now to screen deals that work in the rate environment you're actually in.

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