The 70% Rule is a general rule of thumb to see if a fix and flip deal is worth pursuing. It will help you quickly assess the maximum purchase price for a wholesale deal.
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The 70% Rule in Flipping Houses states that an investor should not pay more than 70% of the After Repair Value, minus repairs, for a home to make enough money from the flip to be worth it. If a property is worth $200,000 after you fix it up, then the 70% Rule states that your offer should be $140,000 less any repairs you will need to put into the property.
This rule of thumb is to keep a rehabber from paying no more than 70% of the after repair value, minus any repair costs or and desired profit.
|After Repair Value||Repairs Needed||Extra Profit Needed|
|Estimated Purchase Price|