What is the 70% rule in house flipping?

The 70% rule states that an investor should pay no more than 70% of the After Repair Value (ARV) of a property, minus the estimated cost of repairs.

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🏢 Real Estate

House Flipping Profit Calculator

Analyze flip profits and calculate the Maximum Allowable Offer (MAO) using the 70% rule.

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After Repair Value (ARV) ($) Estimated market value after all renovations.

Estimated Repairs ($)

Rule Percentage (%) Standard 70% rule.

The House Flipping 70% Rule

House flipping is a strategy where an investor buys a property at a discount, renovates it, and sells it for a profit. The 70% Rule is a common benchmark used to determine the maximum price an investor should pay.

After Repair Value (ARV): The estimated price the home will sell for once it is fully renovated.
Repairs: The total estimated cost of materials and labor for the renovation.

Formula for MAO (Maximum Allowable Offer): (ARV × 0.70) - Repairs

The remaining 30% accounts for the investor's desired profit, holding costs, and selling expenses.