70% Rule Calculator
The 70% rule caps what a house flipper should pay: maximum offer = ARV × 70% − repair costs. The 30% held back covers holding, selling, financing and profit — so the rule stops you overpaying before you dig into a full analysis.
Use this 70% rule calculator to find your maximum allowable offer (MAO) on a flip in seconds. Enter the after-repair value and your repair estimate, and it applies the classic 70% rule — adjustable to 65% or 75% for your market — to show the most you can pay and still leave room for costs and profit.
Enter the after-repair value, repair costs and rule percentage, then press Calculate to see your maximum offer.
How the 70% rule calculator works
The 70% rule is the back-of-the-napkin math nearly every house flipper runs first. It exists to answer one question fast: what is the most I can pay for this property and still make money? Rather than itemize every cost, it uses a single blunt discount — you agree to be “all in” for no more than 70% of what the finished house will be worth, then carve out the repair budget on top. Whatever is left is the most you should offer.
That leftover 30% is doing a lot of quiet work. It is meant to absorb the closing costs on both the purchase and the sale, the holding costs while you renovate, any loan interest, and — crucially — your profit. Because it lumps all of that into one number, the rule is a screen, not a final answer. Once a deal passes it, run the numbers properly with the fix & flip calculator, which itemizes holding, financing and selling costs to confirm the profit is really there.
The 70% rule formula
- ARV — after-repair value, what the finished home will sell for
- 70% — the share of ARV you cap your total basis at (adjustable)
- Repair costs — your full renovation budget
Choosing your percentage
The “70” is not sacred — it is a dial you set for the deal. In a hot, fast-selling market with reliable comps, experienced flippers sometimes stretch to 75%, accepting a thinner cushion because they trust the resale. In a slower or riskier market, or on a first flip, tightening to 65% builds in more protection against blown repair budgets and soft sale prices. Expensive homes with light cosmetic work can also justify a higher percentage, while cheap homes with heavy rehab often need a lower one. Move the percentage in the calculator and watch how sharply your maximum offer changes.
How to estimate ARV and repair costs
The 70% rule is only as good as the two numbers you feed it, and both take judgement. To estimate ARV, pull three to six recent sales of fully renovated homes as close as possible to your property — same neighbourhood, similar size, beds and baths, sold within the last three to six months — and use their price per square foot as your anchor. Lean on sold comps, not optimistic active listings. For repair costs, walk the property and price the big-ticket items first — roof, HVAC, kitchen, bathrooms, flooring and any structural or permit work — then add a contingency of 10% to 20% for the surprises that surface once walls open up. Because one wrong assumption on either number flows straight through to your offer, staying conservative on both is what keeps a flip profitable.
Where the 70% rule falls short
Its speed is also its blind spot. The rule assumes your 30% cushion is the right size for this deal, but real costs vary. A long hold at high interest, a hefty agent commission, or an ARV estimate that proves optimistic can all eat the margin the rule assumed was there. Treat a passing number as permission to dig deeper, never as a green light on its own. The flippers who last are the ones who verify the rule of thumb with a line-by-line budget before they sign anything.
Estimate only — not investment advice. The 70% rule is a screening guideline; confirm ARV with local comparables and itemize every cost before making an offer.
How to use it & key terms
Enter the after-repair value, your repair budget and the rule percentage, then press Calculate to see the maximum allowable offer and how it breaks down.
| Term | What it means |
|---|---|
| 70% rule | Pay no more than 70% of ARV minus repairs. |
| ARV | After-repair value — the finished home's expected sale price. |
| MAO | Maximum allowable offer — the most you should pay. |
| Repair costs | Your full renovation budget to reach the ARV. |
| Cushion | The held-back 30% covering holding, selling, financing and profit. |
| Comps | Comparable recent sales used to estimate the ARV. |
Where the 70% rule fits in a flip
The 70% rule is a fast screening filter: your maximum offer is roughly the after-repair value (ARV) times 0.70, minus the repair budget. The 30% held back is not profit — it is the cushion that absorbs holding costs, financing, closing and selling fees, and your margin for the risk of the project. Used well, it kills bad deals in seconds, before you spend hours on a full analysis.
It is a guideline, not a law. In a hot market with cheap money and light repairs, experienced investors may stretch to 75% or higher; in a slow or volatile market, or on a heavy rehab, a more conservative 65% protects against surprises. Whatever percentage you choose, treat the result as a starting ceiling and confirm it with real repair bids and honest comparable sales — an optimistic ARV is the single fastest way to turn a “good” number into a loss.
Sources & methodology
The calculator applies the standard house-flipping guideline: maximum allowable offer equals the after-repair value multiplied by the chosen percentage (70% by default) minus the estimated repair costs. The held-back percentage is a rule-of-thumb allowance for holding, selling, financing and profit and is not itemized, which is what makes the rule a fast screening tool rather than a full deal analysis.
Sources: Standard real-estate investing 70% rule (ARV × 70% − repairs = maximum allowable offer) used to screen fix-and-flip deals.
Using your maximum offer at the negotiating table
Your maximum allowable offer is a ceiling, not an opening bid — and confusing the two is one of the quickest ways to erode a flip's margin before any work begins. The number above is the most you can pay and still leave room for costs and profit. In practice your first offer usually comes in below it, giving you space to negotiate upward if the seller pushes back, while the maximum allowable offer marks the line you simply will not cross. A disciplined flipper decides that limit before emotions enter the room and lets the math, not the seller, set it — treat it as a target rather than a limit and you hand your cushion straight away.
Getting a low number accepted is less about the price itself and more about the reasoning behind it. Motivated sellers — an inherited house, a tired landlord, a property that has lingered unsold — often value certainty and speed over squeezing out the last few thousand, so a clean, fast offer with few contingencies can matter as much as the figure. When you come in well under asking, anchor the number to something concrete: the recent sold comparables that set your after-repair value, and the repair estimate that explains the discount. It also helps to keep a steady funnel of leads, because the investor who can comfortably walk away from any single house is the one who negotiates from strength.
The hardest part is discipline once negotiation starts. Auction fever is real, and it is easy to talk yourself into “just a few thousand more” on a property you have grown attached to — but every dollar above the ceiling comes straight out of profit or your safety margin. If a bidding contest pushes the price past your maximum, the right move is almost always to walk and let the next deal come. Remember, too, that the ceiling is not fixed: if stronger comparables lift your after-repair value, or a contractor revises the repair budget, re-run the numbers before you move. Keeping a written maximum in front of you during talks is a simple guard against the heat of the moment — let the math set the limit, and pursue the deals that clear it rather than forcing the ones that do not.
Frequently asked questions
What is the 70% rule in house flipping?
It says a flipper should pay no more than 70% of a property's after-repair value minus estimated repairs. The 30% cushion covers holding costs, selling costs, financing and profit, so the rule keeps you from overpaying at the offer stage.
How do you calculate the 70% rule?
Multiply the ARV by 70%, then subtract the estimated repair costs — that is your maximum allowable offer. On a $300,000 ARV with $45,000 of repairs, MAO is 300,000 × 0.70 − 45,000 = $165,000.
What is ARV?
ARV is after-repair value — what the property should be worth once renovations are complete, usually estimated from recent sales of comparable finished homes nearby. Everything in the rule flows from ARV, so accuracy matters.
Why is it 70% and not another number?
The 30% held back is a rough allowance for closing on both ends, holding costs, financing and profit. In hot markets some investors stretch to 75%; on riskier deals they tighten to 65% for a bigger safety margin.
Can I use a different percentage?
Yes — the calculator lets you change it to match your market and risk. A lower percentage gives a larger cushion and lower offer; a higher one lets you bid more but leaves less room for surprises.
Does the 70% rule include closing and holding costs?
Not explicitly. It bundles closing, holding, financing and profit into the 30% held back, which is why it is only a fast screen. For a real offer, itemize those with a full fix-and-flip analysis.
Is the 70% rule accurate?
It is a rule of thumb, not a precise tool. It is great for filtering deals but can be too loose on pricey homes with light repairs and too strict on cheap homes with heavy repairs. Confirm promising deals with a detailed budget.
What is a maximum allowable offer (MAO)?
The highest price you can pay for a flip and still hit your target profit after all costs. The 70% rule is one way to estimate it; you can also subtract every itemized cost and your desired profit from the ARV.
How do I estimate ARV?
Estimate after-repair value from recent sales of comparable, fully renovated homes near your property — ideally three to six sold in the last few months with similar size, beds, baths and condition. Use their price per square foot as your guide, and rely on sold comps rather than active listings, which can be priced too high. ARV is the most important input in the rule.
How does the 70% rule work for wholesaling?
Wholesalers use the same maximum allowable offer, then subtract their assignment fee before offering to the seller. If the rule gives a $165,000 MAO and you want a $10,000 fee, you would aim to get the property under contract near $155,000 so your end buyer still hits the rule. Tighter ARV and repair estimates leave more room for the fee.