70% Rule Calculator
The 70% rule is the classic fix-and-flip screen. Cap your offer at 70% of after-repair value, minus repair costs, and the remaining 30% absorbs transaction costs, holding costs, and your profit. Use this calculator to set your max offer in seconds.
Flip Inputs
The 70% rule sets a maximum offer for a fix-and-flip: pay no more than 70% of ARV minus repair costs.
The expected market value after the rehab is complete.
Total budget for materials, labor, and a contingency.
Tight markets sometimes accept 75%. Hot retail flips get squeezed to 65% to 70%.
Maximum Allowable Offer
Don’t pay more than this for the property.
What is the 70% rule?
The 70% rule is a discipline tool for flippers. It says: pay at most 70% of ARV (after-repair value) minus repair costs. Why 70%? The remaining 30% covers ~3% closing on the buy, ~8% selling costs (agent + concessions), ~3% holding costs during the rehab, and ~16% as your profit margin. Adjust the multiplier for your market.
The formula
How to set the multiplier
- 65%: slow markets, risky neighborhoods, first-time flippers.
- 70%: standard. Most experienced flippers in stable markets.
- 75%: hot markets where 70% deals don’t exist. Tighter margins, faster sales.
What this calculator doesn’t do
The 70% rule sets a max offer. It doesn’t guarantee profit. Use the Fix & Flip Calculator to model the full deal: holding period, financing costs, and net profit after closing costs and commissions.
Frequently asked questions
What is the 70% rule for fix-and-flips?
The 70% rule sets a maximum offer on a flip: pay no more than 70% of the after-repair value (ARV) minus the cost of repairs. The remaining 30% covers transaction costs (closing, holding, selling) plus your profit.
How do you calculate the 70% rule?
Maximum Allowable Offer = (ARV × 70%) − Repair Costs. Example: $300,000 ARV × 70% = $210,000. Subtract $35,000 in repairs → $175,000 max offer.
Where does the 30% buffer go?
It absorbs the costs of doing the deal: ~3% buy-side closing, ~5% to 8% sell-side commission, ~2% to 3% holding costs (mortgage, taxes, insurance, utilities during the rehab), and the rest is your profit margin. The tighter the multiplier (e.g. 65%), the more cushion for surprises.
When does the 70% rule break down?
In hot markets, you may not find deals at 70%. Successful flippers in those markets often accept 75%. In slower markets or risky neighborhoods, smart investors tighten to 65% or 60%. The 70% number is a baseline, not a law.
Should I use the 70% rule for BRRRR deals?
Yes, conceptually. BRRRR investors use the same math because the goal is to refinance at 75% LTV of ARV, and you want to leave little or no cash in the deal. If you buy at 70% of ARV plus repairs, a 75% cash-out refi recovers most of your capital.
How accurate are the ARV and repair estimates?
They’re the entire game. Use 3+ recent comparable sales of fully-rehabbed properties within 0.5 miles to set ARV. Get contractor bids (or pad your own estimate by 20%) for repairs. Most flips that lose money do so because ARV was optimistic or repairs blew the budget, not because the multiplier was wrong.
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