The 70% rule says a house flipper should pay no more than 70% of the after-repair value minus the repair costs. Enter the ARV and repairs to get your maximum allowable offer, adjust the percentage for your market, subtract a wholesale fee, and compare it with the seller's asking price.
Last updated:
Deal
$
What the house should sell for after the renovation, from recent comparable sales.
$
% of ARV
70 is the classic rule; 65 is tighter, 75–80 is common in hot markets.
$
Enter your fee if you are wholesaling the contract to another investor.
$
Flip costs (for the profit estimate)
% of price
months
$/ mo
Loan interest, taxes, insurance, utilities.
% of ARV
Agent commissions and seller closing costs.
Enter your values to see the result.
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How to use the 70% Rule Calculator (Max Offer)
Enter the after-repair value from recent sales of renovated homes nearby.
Enter the estimated repair costs for the full renovation.
Keep 70% or adjust the percentage for your market and risk tolerance.
Add a wholesale fee and the asking price if you have them.
Read your maximum offer, the pass/fail check and the estimated profit.
The 70% rule formula
Maximum allowable offer (MAO) = ARV × 70% − repair costs − wholesale fee
Example: ARV $300,000, repairs $45,000. $300,000 × 70% = $210,000, minus $45,000 = $165,000. If the seller asks $175,000, the price is $10,000 too high. Bought at $165,000 with 2% buying costs, 6 months of $1,500 holding costs and 7% selling costs, the estimated profit is about $56,700, or 18.9% of the ARV, before loan interest and taxes.
Maximum offer quick reference
ARV
Repairs
65% rule
70% rule
75% rule
$150,000
$25,000
$72,500
$80,000
$87,500
$200,000
$30,000
$100,000
$110,000
$120,000
$250,000
$40,000
$122,500
$135,000
$147,500
$300,000
$45,000
$150,000
$165,000
$180,000
$400,000
$60,000
$200,000
$220,000
$240,000
$500,000
$75,000
$250,000
$275,000
$300,000
Getting the inputs right
ARV: use sold prices of similar renovated homes from the last few months, close by, not asking prices.
Repairs: get contractor bids or a line-item scope and add a contingency for surprises.
Percentage: the rule is a starting point; confirm with a full budget in the house flipping calculator.
Planning to keep the property as a rental instead? Run it through the BRRRR calculator.
Frequently asked questions
What is the 70% rule in house flipping?
It is a rule of thumb for the most you should pay for a property you plan to renovate and resell: maximum offer = after-repair value × 70% − repair costs. The remaining 30% of the ARV is meant to cover buying, holding and selling costs plus your profit.
How do I calculate the maximum allowable offer?
Multiply the ARV by 0.70 and subtract the estimated repairs. For a house worth $300,000 after a $45,000 renovation: $300,000 × 0.70 = $210,000, minus $45,000 = $165,000 maximum offer.
How does a wholesaler use the 70% rule?
A wholesaler works backward from the price an end buyer (a flipper) can pay, which is ARV × 70% − repairs, and subtracts their assignment fee. If the flipper's max is $165,000 and the fee is $10,000, the wholesaler should contract the house for no more than $155,000.
Is 70% always the right percentage?
No. In competitive, high-priced markets investors often go to 75% or 80% because the dollar margin is still large, while on cheaper houses or risky projects they may use 65% or less. Adjust the percentage and check the estimated profit to see whether the margin still works.
What costs does the 30% need to cover?
Typically buying closing costs, loan interest and points, property taxes, insurance and utilities during the project, agent commissions and seller closing costs when you sell, and your profit. With 6% to 8% selling costs, several months of holding costs and financing, the profit left is usually well under the full 30%; use the profit estimate to check your deal.
Does the 70% rule include repair costs?
Yes, repairs are subtracted after taking 70% of the ARV. They are not part of the 30% margin. Underestimating repairs is the most common way the rule fails, so many investors add a 10% to 20% contingency to the repair estimate.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.