The 70% rule is a quick screening formula: take 70% of a home's after-repair value, subtract the repair costs, and what's left is the most you should offer. The 30% you hold back covers holding costs, selling costs, and profit. Run your deal below.
Not sure of the ARV? It comes from comparable sales nearby — learn how to run comps, because this calculator is only as accurate as the ARV you feed it.
The formula is one line: Maximum Offer = (ARV × 0.70) − Repairs.
The missing 30% isn't a discount for its own sake. It's the room the deal needs to survive reality: roughly 10% goes to holding and selling costs (loan payments, insurance, agent commissions, closing), and about 20% is your profit and your cushion for everything the inspection didn't catch. Skip the cushion and the first surprise repair comes straight out of your profit.
Hot markets: In fast, competitive markets, deals rarely trade at 70% — experienced flippers may work at 75–80% because their crews are cheaper and their timelines shorter. Tighter margin, same discipline: they change the number on purpose, never by accident.
Wholesaling: If you're wholesaling, your assignment fee comes out of the same number. A wholesaler targeting a $10,000 fee on the example above would offer the seller closer to $100,000, leaving room for the end buyer at $110,000.
Cheap houses: On very low-priced homes, fixed costs (closing, holding) eat a bigger share, so many investors use 65% or lower. The rule is a screen, not a law — adjust the percentage only when you can name the reason.
The one-page version of this math, plus the comping checklist we run before any offer. Print it. Keep it in the truck.
After-Repair Value — what the home will be worth once it's fully renovated, based on recent comparable sales ("comps") of similar finished homes nearby. It's the single most important number in the formula, and the one beginners most often inflate.
It's designed for flips and wholesale deals. For buy-and-hold rentals, investors lean on cash-flow math instead — rent minus all expenses — and tools like the 1% rule as a first screen. Our Rental Cash Flow Calculator is built for that.
Then, on these numbers, it's not your deal — and walking away is the skill. Sellers' situations change; a polite no today with your number on the table often becomes a yes in 60 days.
Yes. Estimate honestly, then add 10–15%. Repairs are the cost most likely to grow mid-project, and the 70% rule can't protect you from a made-up repair number.
No. It's a national rule of thumb. Your market, price band, and exit strategy all move it — which is exactly why we teach the math under the rule, not just the rule.
Once an offer is accepted, run the full profit picture — purchase, rehab, holding, and selling costs included.
Estimate repairs by scope and square footage — the number this calculator depends on.
The ARV makes or breaks the 70% rule. Learn to find it properly.