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70% rule calculator
The 70% rule sets a flipper's ceiling: pay no more than 70 percent of after-repair value, minus repairs. Enter the ARV and rehab budget to get your maximum allowable offer and the margin the rule leaves you.
Your maximum allowable offer is $170,000. Enter the asking price to see whether the deal fits at list.
Flipping to hold and refinance instead? Use the BRRRR calculator.
How the 70% rule works
A flip has to pay for four things out of the spread between what you buy for and what you sell for: the repairs, the cost of holding and financing the property while you work, the cost of selling it (commissions and closing), and your profit. The 70% rule is a shortcut that reserves 30 percent of the after-repair value to cover the last three all at once, and then subtracts repairs on top. Whatever's left is the most you can pay and still expect to make money.
The two numbers that make or break it
The rule is only as good as your ARV and your repair estimate, and both are easy to get wrong in the optimistic direction. An ARV pulled from aspirational listings instead of actual solds, or a rehab budget that ignores the surprise behind the wall, will hand you a maximum offer that quietly guarantees a loss. Nail those two before you trust the output.
When to move off 70 percent
Seventy is a starting point, not a law. In a fast, low-inventory market with cheap money, experienced flippers go to 75 percent to win deals. On a lower-priced house, where fixed costs eat a bigger share, or a heavy rehab with real timeline risk, they drop to 65 percent or lower. The percentage is your risk dial.
The 70% rule end to end
× 70% = $210,000
less estimated repairs − $40,000
maximum allowable offer = $170,000
At $170,000 all-in on the purchase and $40,000 in rehab, you're into the property for $210,000 against a $300,000 sale. A $90,000 gross spread to cover months of holding, financing, roughly $18,000 in selling costs, and your profit. Pay $185,000 instead of $170,000 and that cushion shrinks by a sixth before you've swung a hammer. That's the discipline the rule enforces.
70% rule questions
What is the 70% rule in house flipping?
It says pay no more than 70 percent of a property's after-repair value minus the cost of repairs. The 30 percent band absorbs holding costs, selling costs, financing, and profit.
How do you calculate maximum allowable offer?
Maximum allowable offer equals after-repair value times 70 percent, minus estimated repair costs. ARV of $300,000 with $40,000 of repairs gives 300,000 × 0.70 − 40,000 = $170,000.
Should I always use 70 percent?
No. In hot, low-inventory markets experienced flippers stretch to 75 percent; on risky, high-holding-cost, or lower-priced deals they drop to 65 percent or less. The percentage is your margin for everything the rule doesn't itemize.
Does it include holding and selling costs?
Only implicitly: the 30 percent gap covers holding, financing, commissions, closing, and profit all at once. On a thin deal, model those explicitly instead of trusting the band.
Is the 70% rule good for rentals?
It's built for flips. For a BRRRR or a buy-and-hold, what matters is the refinance appraisal and the resulting cash flow and cash-left-in. Use a BRRRR or cash-on-cash calculation instead.
Every calculator
Buying it to rent, not flip?
Paste a listing and Faro underwrites the hold. Comps, cash flow, and the exact price your rules can support.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.