The most you should ever offer.
The 70% rule caps your bid so a fix-and-flip leaves room for repairs, holding costs, selling costs and profit. Enter the after-repair value and your rehab budget to see your maximum allowable offer.
The deal
Lower the rule to 65% for slow markets or big rehabs, raise to 75% for premium markets where dollar profits are larger.
What this means
Where the ARV goes
Your offer, repairs and the 30% buffer
The deal at a glance
Maximum offer at each rule percentage
Same ARV and repairs, different discipline. Tighter percentages protect thinner deals.
| Rule | Max offer (MAO) | 30% buffer | Projected profit | Margin on ARV |
|---|
The 70% rule, explained
The 70% Rule
Maximum offer = 70% × ARV minus rehab cost. The 30% buffer covers acquisition costs, holding costs, selling costs, and profit. Used by house flippers as max-bid filter.
What the 30% Covers
Roughly: 8-10% selling costs (commission, closing). 5-10% holding costs (taxes, insurance, utilities, mortgage during rehab). 10-15% profit. Adjust if your numbers differ.
When 70% Is Too Aggressive
High-tax states need 65% rule. Long-hold flips need 65%. Slow markets need 60%. Premium markets ($500k+) can use 75% because dollar-amount profits are larger.
70% Rule Alternatives
Some flippers use 75% in stable markets. BRRRR (rental focus) sometimes accepts 80% because they're not selling. Wholesale offers go to 65% or lower.
Common questions
Is 70% rule always right?
No, adjust for market. 65% in high-cost areas, 75% in stable markets with strong demand.
What if seller won't accept 70% offer?
Walk away. The rule exists because over-paying kills flip profits. Better to lose a deal than lose money.
Does this include closing costs?
Yes, the 30% buffer covers acquisition + sale closing costs. No additional adjustment needed.
Should I use ARV or As-Is value?
ARV (after repair). The whole point is to buy below repaired value to profit from forced appreciation.
What if I'm wholesaling?
Use 65% rule. Wholesaler needs to leave room for flipper to also profit from your contract.
Estimates for planning only. The 70% rule is a screening filter, not a substitute for real comps, a contractor bid and a full holding-cost budget. Verify ARV with recent sales and confirm every number before you make an offer.