70% Rule House Flip Calculator
Free online 70% rule house flip calculator. Work out the maximum offer for a fix-and-flip property using ARV, repair costs, closing costs, and holding costs instantly.
Enter Values
Estimated value after all repairs
Buy + sell closing costs (default 3%)
Months to complete and sell (default 6)
Loan interest, taxes, insurance, utilities
Result
Enter values above and click Calculate to see your result.
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Formula
How it works: The 70% Rule is an investor rule of thumb: never pay more than 70% of the After Repair Value (ARV) minus estimated repair costs. The 30% margin covers profit, closing costs, holding costs, and contingency.
Worked Example
What Is the 70% Rule in House Flipping?
The 70% Rule is a widely adopted guideline used by real estate investors to calculate the maximum price they should offer for a fix-and-flip property. This fundamental rule helps ensure a healthy profit margin and accounts for various project expenses. It dictates that an investor should never pay more than 70% of the After Repair Value (ARV) of a property, minus the estimated repair costs. The ARV is the property's anticipated market value after all renovations are completed. The remaining 30% of the ARV is intended to cover the investor's profit, as well as crucial overheads such as closing costs, holding costs during the renovation period, and a contingency fund for unforeseen issues. By adhering to this rule, investors can mitigate risks and increase their chances of a successful and profitable house flip. It provides a structured approach to valuing distressed properties, making it an indispensable tool for both novice and seasoned flippers seeking to make smart investment decisions.
- A foundational principle for profitable real estate flipping projects.
- Helps investors determine a safe maximum purchase offer for properties.
- Crucial for managing risk and unexpected project costs during renovation.
- Provides a clear profit margin and covers all major investment expenses.
Understanding this strategic valuation method is essential for making informed real estate investment decisions. Try our 70% Rule House Flip Calculator to quickly determine your maximum offer and streamline your property analysis.
You can also calculate changes using our Rental Yield and Cap Rate Calculator, Reverse Markup Calculator or E-commerce Profit Calculator.
Frequently Asked Questions
What is the 70% Rule?
The 70% Rule states that investors should pay no more than 70% of the After Repair Value (ARV) minus repair costs. The 30% cushion covers profit (target ~15%), closing costs (~3-6%), holding costs, and unexpected expenses.
What is ARV?
After Repair Value (ARV) is the estimated market value of a property after all renovations are complete. It's determined by comparing recent sales of similar renovated properties (comps) in the same neighborhood.
Is 70% always the right rule?
The 70% rule is a starting point. In hot markets, some investors use 75-80% (tighter margins, more competitive offers). In slower markets, 65% may be safer. Always run detailed numbers for each deal.
What holding costs should I include?
Monthly holding costs typically include: mortgage/hard money loan interest, property taxes, insurance, utilities, HOA fees, and lawn/property maintenance. These add up quickly over a 4-6 month flip.
Can I use this 70% Rule House Flip Calculator on my own web page?
You can. Look for the "Embed" button near the top of this calculator. It lets you pick a size, border style, and color palette, then gives you an iframe tag to paste into any webpage. The widget is responsive, loads fast, and costs nothing. More details at calculory.com/services/embed-calculators.
Financial Disclaimer
This calculator is provided for informational and educational purposes only. It is not intended as financial, investment, or tax advice. Results are estimates and may not reflect your actual financial situation. Always consult a qualified financial advisor or tax professional before making any financial decisions based on these results.
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