70% Rule Calculator
The flipper's discipline anchor: maximum purchase price = (ARV × 0.70) − rehab − holding costs.
Inputs
Edit any field — results recompute instantly.
The market value of the property after planned renovations, based on 3+ sold comps within 0.5 miles in the last 90 days.
Total construction + permits + contingency. Add 10-15% contingency to your contractor bids.
Carry interest + taxes + insurance + utilities for the rehab + listing period (typically 4-7 months).
Acquisition costs + agent commission on sale (typically 5-6% of ARV).
70% is standard. Stretch to 72-75% in appreciating markets; tighten to 65-67% in declining markets or unfamiliar rehab scopes.
Results
Computed live from your inputs.
The highest price you can pay and still hit your target profit margin. Any offer above this erodes your spread.
The 30% buffer at the standard rule — covers profit, slippage, and the cost of being wrong.
Standard 70% rule = 30% gross profit margin on ARV.
What this calculator does
The 70% rule limits a flipper's all-in cost to 70% of After Repair Value. The 30% spread absorbs rehab overruns, ARV slippage, agent commissions on the exit, and the flipper's actual profit margin. This calculator outputs the maximum allowable offer (MAO) on a flip given your ARV, rehab budget, and target spread.
How to use the 70% rule on a flip
- Estimate ARV from 3-5 sold comps within 0.5 miles, last 90 days, same bedrooms / bathrooms / square footage (±20%).
- Multiply ARV × 70% to get your maximum all-in cost.
- Subtract your rehab estimate (with 10-15% contingency).
- Subtract carrying costs for the expected hold period.
- Subtract closing costs (both acquisition and disposition — typically 1% + 5-6%).
- The result is your MAO — the highest price you can pay.
Terms worth knowing.
After Repair Value (ARV) is the projected market value of a property after all planned renovations are complete, based on recently-sold comparable properties in similar condition within a half-mile radius. It is the single most important number in any flip or BRRRR underwrite.
The 70% rule is a flipper's underwriting heuristic: total all-in cost (purchase + rehab + carry + closing) should not exceed 70% of the property's After Repair Value. The remaining 30% covers profit, slippage, and the cost of being wrong.
Maximum Allowable Offer (MAO) is the highest price a wholesaler or flipper can pay for a property and still hit their required profit margin. Derived from the 70% rule: MAO = (ARV × 0.70) − repair costs − assignment fee.
Flipping is the strategy of buying a distressed property, renovating it to retail standard, and reselling at full market value within 4-9 months. Profit comes from the spread between all-in cost (purchase + rehab + carry + closing) and net sale proceeds.
A rehab budget is the line-item plan of construction costs for a flip or BRRRR — typically broken down by trade (demo, framing, plumbing, electrical, drywall, paint, flooring, kitchen, baths) and contingency. Rehabs without a written budget consistently run 20-40% over informal estimates.
More REI math tools.
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