70% Rule Calculator
Maximum allowable offer on a flip, free and without a sign-up
Seventy percent of the after repair value, minus your rehab budget. Adjust the percentage for your market and add an assignment fee if you are wholesaling.
The deal
After repair value and the work it needs
Not sure? Work it out with the ARV calculator.
Build it line by line in the rehab cost estimator.
65 to 80 is the usual range. Lower in cheap or slow markets.
Leave at zero if you are buying it yourself.
Maximum allowable offer
- 70 percent of ARV$210,000
- Less rehab-$50,000
- Held back for costs and profit$90,000
That held-back amount is not profit. It covers both sets of closing costs, loan interest and points, the sale commission, utilities and insurance while you hold, and the overrun.
How the 70 percent rule works
Maximum offer = (ARV x 70%) - rehab budget
It is a screen, not a valuation. Its job is to tell you in ten seconds whether a property is worth a full analysis, so you can say no to most of them quickly and spend your time on the rest.
What the 30 percent actually pays for
- Buying costs: title, escrow, lender points, inspection.
- Holding costs: interest, insurance, utilities and taxes for every month you own it. Hard money at 11 percent on 200,000 dollars is about 1,800 dollars a month before anything else.
- Selling costs: commission, transfer taxes and concessions, commonly 6 to 8 percent of the sale price.
- The overrun: whatever the walls hide.
- Your profit, which is what remains.
When to move off 70 percent
In a 120,000 dollar market, fixed costs are a much larger share of the sale, so 65 percent is often the honest number. In a 900,000 dollar market the same costs are proportionally smaller and competitive bidding pushes deals to 75 or 80 percent. The percentage is the dial you turn for your own market, which is why it is an input here rather than a constant.
Frequently asked questions
What is the 70 percent rule in house flipping?
The 70 percent rule says the most you should pay for a flip is 70 percent of the after repair value, minus the rehab budget. On a 300,000 dollar ARV with a 50,000 dollar rehab, that is 210,000 minus 50,000, so 160,000 dollars.
Why 70 percent and not 80 or 90?
The 30 percent you hold back is not profit. It pays the purchase and sale closing costs, the loan points and interest for the months you own it, the agent commission on the way out, utilities and insurance while it sits, and the overrun the inspection finds. What is left after all of that is the profit.
When should I use a different percentage?
Lower it in cheap markets, where fixed costs eat a larger share of a small sale price, and in slow markets where you will hold longer. Raise it in expensive markets, where the same fixed costs are a smaller share, and where competition means nobody wins a deal at 70 percent. Investors commonly work between 65 and 80 percent.
Does the 70 percent rule work for wholesaling?
It is the starting point, but a wholesaler has to fit an assignment fee inside the same number. Take the 70 percent figure, subtract the rehab, then subtract the fee you intend to earn, and that is what you can offer the seller.
Is the 70 percent rule a law?
No. It is a screening shortcut for deciding which deals deserve a full analysis. Once a property passes, price it properly: real comparable sales, a contractor bid rather than a guess, and the actual holding costs for your loan and your market.
Related calculators
- ARV Calculator: get the after repair value first
- Fix and Flip Calculator: full profit with holding costs
- Wholesale Calculator: fit an assignment fee inside the spread
- Rehab Cost Estimator: build the budget line by line
A rule of thumb narrows the list. Real comparable sales decide the offer. Run the address through Resideline for the comps behind the ARV.