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70 Percent Rule Calculator

Enter the after-repair value and repair costs to find your maximum offer.

How it is calculated

The tool takes a fixed share of the after-repair value (ARV) and subtracts the repair budget: ARV at rule = ARV × rule% ÷ 100 and max offer = ARV at rule − repair_costs. The rule percentage is an input that defaults to 70, so you can tighten it to 65 in a hot market or loosen it to 75. It also reports the offer as a share of ARV, max offer ÷ ARV × 100, and echoes your repair figure. ARV must be above zero, the rule percentage must be between 0 and 100, and repairs cannot be negative. If repairs exceed the rule amount the offer comes out negative, which means the deal does not work at that price. The rule is a screening shortcut and ignores your actual financing and selling costs.

Worked example

A house is expected to sell for 300,000 once renovated, and the repair estimate is 45,000. Applying the 70% rule: 300,000 × 70% = $210,000.00. Maximum offer: 210,000 − 45,000 = $165,000.00. As a share of ARV that is 165,000 ÷ 300,000 = 55.00%. If the seller asks 180,000, the deal fails the rule by 15,000 and you would need a lower price or a smaller repair scope.

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Common mistakes

  • Entering the current market value of the run-down house as the ARV. The rule needs the expected resale price after repairs, normally taken from comparable renovated sales.
  • Using an optimistic repair figure with no contingency. Every extra dollar of repairs lowers the maximum offer by a full dollar, so underestimating the work directly inflates your offer.
  • Treating the rule as a guarantee of profit. The 30% gap has to cover your profit, loan interest, taxes, insurance and selling costs; a long hold can eat it all.
  • Keeping 70 in a very expensive or very cheap market without checking. The percentage is adjustable here, and the same rule does not suit every price level.
  • Ignoring a negative result. A negative maximum offer means the repairs alone are above 70% of ARV, not that the number is an error.

About this calculator

The 70% rule is a quick screening formula real estate investors use to cap what they'll pay for a fix-and-flip property: Maximum offer = (After-Repair Value × 0.70) − Estimated repair costs. The 30% buffer below ARV is meant to cover the flipper's profit margin plus carrying costs — financing interest, insurance, utilities, property taxes and selling costs (agent commissions, closing costs) — that eat into a deal even when the repair budget itself is accurate.

Flippers use this rule as a fast first-pass filter before running a detailed proforma, since it lets them quickly reject deals where the seller's asking price already exceeds the maximum offer — a house that “looks like a good deal” on the surface often fails the 70% test once realistic repair costs and holding costs are accounted for.

Take 70% of the after-repair value, subtract the repair estimate, and you have the most a flipper should offer; enter the value and the repair budget (the 70% can be changed) and that ceiling is shown.

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