What Is 70% Rule?
The 70% rule is a fix-and-flip screening formula: an investor should pay no more than 70% of a property's after-repair value, minus estimated repair costs.
Formula
Maximum Offer = (ARV × 70%) − Estimated Repair Costs
Example
A property with a $300,000 ARV and $40,000 in needed repairs supports a maximum offer of $170,000 under the 70% rule.
Why It Matters
The 30% buffer is meant to cover holding costs, selling costs, and profit margin — it's a conservative starting point, not a guarantee of a specific return.
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