70% Rule Calculator
Find the maximum you should offer on a house flip using the 70% rule: after-repair value times your rule percentage, minus repair costs and any wholesale fee. Enter your numbers below to instantly see your maximum allowable offer, that offer as a percent of ARV, and the spread against the seller's asking price.
How to Calculate the 70% Rule
The 70% rule is a fast screening tool flippers and wholesalers use before running a full deal analysis: multiply the property's after-repair value (ARV) by your chosen rule percentage, then subtract your repair estimate and any wholesale fee. What's left is the most you should offer for the property. Once a deal clears this screen, the fix and flip profit calculator works out the full project economics — total cost, holding costs, and net profit margin.
Why 30% Is Reserved
The share of ARV not included in the maximum offer (30% at the default rule percentage) is meant to cover everything the simple offer math leaves out: holding costs while the property is renovated and listed, real estate agent commissions and closing costs on the eventual sale, financing costs if the purchase or rehab is funded with a loan, and a margin of profit for the risk taken on. A flipper financing part of the purchase with a loan can check the resulting payment against a mortgage amortization calculator to see how much of that margin financing costs alone will consume.
Reading the Spread Against Asking Price
Comparing the maximum allowable offer to the seller's actual asking price tells you immediately whether a listing is worth pursuing. A positive spread means there is room to offer below asking and still meet your rule; a negative spread means the asking price is already above what the rule allows, and you would need to negotiate the price down, find a way to lower repair costs, or walk away.
When the Rule Says a Deal Doesn't Work
If repair costs are large relative to ARV, the maximum allowable offer can come out at or below zero. This calculator does not floor that result at zero: a negative maximum offer is the rule correctly reporting that no purchase price makes this deal work under your assumptions, rather than a calculation error to be hidden.
When the Plan Is to Refinance, Not Sell
The 70% rule is built around flips that end in a sale, with the leftover 30% of ARV covering selling costs and profit. An investor planning to refinance and keep the property instead — pulling cash back out against the ARV rather than selling into it — needs a different set of numbers: refinance loan amount, cash left in the deal, and the cash flow left over once that new loan is in place, all worked out by the BRRRR calculator.
Worked Example
Consider a flip with an after-repair value of $250,000 and an estimated $35,000 in repairs, evaluated at the standard 70% rule with a $5,000 wholesale fee. The seller is asking $130,000.
Inputs Used
- After Repair Value: $250,000
- Repair Estimate: $35,000
- Rule Percentage: 70%
- Wholesale Fee: $5,000
- Asking Price: $130,000
Computed Result
- Maximum Allowable Offer: $135,000
- Offer as % of ARV: 54.00%
- Spread vs. Asking Price: $5,000
How to Read This Result
A rule percentage of 65-75% is a common industry range depending on market speed and risk, though it is never a guarantee of profitability. In this example the maximum allowable offer of $135,000 comes out above the $130,000 asking price, a spread of $5,000 — meaning there is room to offer at or even somewhat above asking and still meet the rule. Raise the repair estimate or lower the rule percentage above to see how quickly that room disappears.
70% Rule Calculator FAQs
What is the 70% rule in house flipping?
The 70% rule is a quick screening heuristic: a flipper should pay no more than 70% of a property's after-repair value (ARV), minus repair costs. The remaining 30% of ARV is meant to cover holding costs, selling costs, financing, and a margin of profit. It is a common industry guideline, not a guarantee that any deal meeting it will be profitable.
Is 70% always the right percentage to use?
No. Flippers in expensive, fast-moving markets sometimes use 75-80%, while those in slower or riskier markets use 60-65%. This calculator lets you adjust the rule percentage so you can see how sensitive your maximum offer is to that assumption.
What happens when repair costs exceed the rule share of ARV?
The maximum allowable offer can come out negative or effectively zero. That is not a bug: it is the calculator telling you the deal does not work at any purchase price given the repair estimate, and you should walk away or renegotiate the scope of work rather than force the numbers.
Should I subtract a wholesale fee even if I am not using a wholesaler?
Only if one is involved. The wholesale fee input is optional and exists for deals sourced through a wholesaler who is being paid to assign the contract; leave it at zero for a deal you are sourcing and negotiating directly.