Free tools / 70% rule calculator
70% Rule Calculator
The flipper's first filter: enter what the house will be worth fixed up and what the repairs will cost, and get the most you should offer — plus an honest look at where the held-back margin actually goes. Free, no signup.
The deal
Everything the renovation will cost, incl. a cushion for surprises
70% is the classic; 65% in slow markets, 75–80% in hot ones
Don't have an ARV yet? Estimate it from comparable sales with the ARV calculator first.
Reality check: where the held-back margin goes
The 30% the rule holds back isn't all profit — adjust these to your market and see what's left.
Commission + closing when you sell
Loan interest, taxes, utilities while you renovate
Closing costs when you purchase
Maximum allowable offer
$165,000
70% of $300,000 − $45,000 repairs
Where the 30% goes
- Margin held back
- $90,000
- Selling costs (8%)
- −$24,000
- Holding & financing (5%)
- −$15,000
- Buying costs (2%)
- −$6,000
- Estimated profit
- $45,000
Buy at the maximum offer and this is roughly what's left after the costs above — about 15.0% of the ARV.
Checking a listing?
For a house at this asking price (with your repair budget), the finished home would need to be worth at least:
ARV ≥ $350,000
If fixed-up homes nearby sell for less than that, the asking price fails the rule.
How to use the 70% rule calculator, step by step
- 1
Enter the after-repair value
What the house will be worth once it's fully renovated — not what it's worth today. Estimate it from recently sold, fixed-up homes nearby; our ARV calculator does this from comparable sales in a couple of minutes.
- 2
Enter the repair budget
Everything it takes to get the house to sell-ready condition, plus a 10–15% cushion — renovations always find surprises behind the walls.
- 3
Adjust the rule to your market
70% is the classic, but it's a dial, not a law: 65% where homes sell slowly or the rehab is risky, 75–80% where prices are high and flips move fast.
- 4
Sanity-check the margin with real costs
The reality-check panel splits the held-back margin into selling costs, holding costs, and buying costs — using percentages you can edit — and shows the profit that actually remains. If profit goes red, the deal doesn't work even at the "maximum" offer.
- 5
Screen listings in reverse
Found a house at a certain asking price? The bottom panel flips the math: it shows what the finished home would need to be worth for that price to pass the rule. If renovated homes nearby sell for less, move on — no comps required to rule it out.
What is the 70% rule?
House flippers see dozens of potential deals for every one worth buying, so they need a way to say no in ten seconds. That's the 70% rule: offer no more than 70% of what the house will be worth after renovation, minus what the renovation costs. It's deliberately rough — a screening tool that keeps you from overpaying, not a substitute for a full deal analysis.
Maximum offer = ARV × 70% − repair costs
The 30% held back covers buying, holding, and selling costs — and the profit.
An example, start to finish
Say fixed-up homes in the neighborhood sell for about $300,000, and the house you're looking at needs $45,000 of work. The rule says: take 70% of $300,000 — that's $210,000 — then subtract the $45,000 of repairs. Your maximum offer is $165,000.
Now the part most explanations skip: what happened to the other $90,000? Roughly $24,000 goes to commissions and closing costs when you sell (8% of the home's value), about $15,000 to loan interest, taxes, and utilities while you own it (5%), and about $6,000 to closing costs when you buy (2%). What's left — around $45,000, or 15% of the ARV — is the profit that pays you for the work and the risk. That's the whole logic of the rule in one deal.
When to bend the rule
The rule's hidden assumption is that costs scale with price — but many don't. A title search costs the same on a $200,000 house and an $800,000 one. So in expensive markets, 70% holds back far more than the costs need, your offers all get rejected, and buyers who understand the math work at 75–85% instead. The opposite holds in slow markets or on gut renovations: more time means more holding cost and more risk, and 65% is the safer dial. The right question isn't "what's the rule?" — it's "does the margin cover my actual costs plus a profit worth the risk?" The reality-check panel answers exactly that.
The rule filters deals. WhoseTitle finds them.
Deals that pass the 70% rule are rarely on the open market. Draw any neighborhood and get every owner inside it — with tenure, absentee status, and likelihood-to-sell signals from public county records, free.
70% rule FAQs
What is the 70% rule in real estate?
A screening rule for fix-and-flip deals: pay no more than 70% of the property's after-repair value (ARV), minus repair costs. On a house worth $300,000 fixed up with $45,000 of repairs needed, the most you should offer is $300,000 × 0.70 − $45,000 = $165,000. It's a fast first filter — deals that fail it are rarely worth deeper analysis.
Why 70%? What does the other 30% cover?
The 30% held back is not profit — it's the budget for everything besides the purchase and the renovation: closing costs when you buy (~2% of ARV), loan interest, taxes, insurance, and utilities while you hold it (~5%), commission and closing costs when you sell (~8%), and the profit that makes the risk worth taking (typically 10–15% of ARV). The calculator's reality-check panel lets you put your own numbers on each piece.
Is the 70% rule too conservative in expensive markets?
Often, yes. The rule's cost assumptions are percentages, but many of the underlying costs don't scale with price — so on a $900,000 ARV, holding 30% back leaves far more margin than the costs require, and no seller will take the resulting offer. Experienced buyers in expensive markets work at 75–85%. In slow or declining markets, or on heavy renovations with more risk, 65% is safer.
What does MAO mean?
Maximum allowable offer — the most you can pay for a property and still hit your profit target. It's the number the 70% rule produces: MAO = ARV × 70% − repairs. Investors treat it as a ceiling for negotiation, not a starting bid.
How do I estimate the ARV?
From comparable sales: recently sold homes near the property, similar in size, that were already renovated when they sold. Average their price per square foot and multiply by your property's square footage. Our free ARV calculator walks through it step by step — estimate the ARV there, then bring it here.
How do wholesalers use the 70% rule?
A wholesaler needs to contract the property BELOW the MAO, because their end buyer — the flipper — needs the deal to work at the rule after paying the wholesaler's fee. If the MAO is $165,000 and the wholesale fee is $10,000, the wholesaler needs the seller to accept about $155,000. That's why wholesalers hunt off-market: on-market sellers rarely accept that spread.