About the 70% Rule Calculator
This 70% rule calculator gives house flippers and wholesalers a fast ceiling for what to pay for a distressed property. The rule says your purchase price should be no more than 70% of the after-repair value (ARV) minus the cost of repairs. The remaining 30% of ARV is meant to cover buying and selling costs, holding costs, financing and your profit.
Enter the ARV from recent comparable sales, your repair estimate and the seller’s asking price. The calculator shows the maximum allowable offer (MAO), how far the asking price is above or below it, and the spread left for costs and profit. Wholesalers can enter an assignment fee to see the most they can contract at and still leave the end buyer a 70% deal.
The 70% figure is a rule of thumb, not a law. Investors in expensive markets often use 75%–80% because fixed costs are a smaller share of a high ARV, while beginners or high-risk projects may use 65%. Adjust the percentage and compare the chart of offers at different rule levels.
With the default inputs, the maximum allowable offer is $165,000.00. Change any value above to recalculate instantly.
How to use the 70% rule calculator
- 1Estimate the after-repair value from three or more recent renovated comps.
- 2Enter a realistic repair budget, including a contingency.
- 3Keep 70% or adjust the rule percentage for your market and risk.
- 4Add an assignment fee if you are wholesaling the contract.
- 5Compare the maximum allowable offer with the asking price before you make an offer.
Formula and method
The maximum allowable offer multiplies the after-repair value by the rule percentage (70% by default) to get the most you should have in the deal in total, then subtracts the repair budget. Wholesalers also subtract their assignment fee so that the end buyer’s price still satisfies the rule.
The spread is ARV minus the purchase price and repairs. It is not profit: it has to pay for purchase and sale closing costs, agent commissions, loan interest and points, insurance, taxes and utilities while the property is held, with the rest being your margin.
- ARV
- After-repair value from comparable sales
- Rule%
- Share of ARV you are willing to have in the deal, usually 70%
- MAO
- Maximum allowable offer (purchase price)
Worked examples
$300k ARV with $45k of repairs
70% of a $300,000 ARV is $210,000. Subtracting $45,000 of repairs gives a maximum offer of $165,000. The seller wants $175,000 — $10,000 over the limit — so you would counter at $165,000 or less.
Wholesaler with a $10k assignment fee
70% of $220,000 is $154,000; minus $30,000 of repairs and a $10,000 fee, the most you can contract at is $114,000. The $110,000 asking price is $4,000 below that, so the deal works for both you and the end buyer.
Higher-priced market using a 75% rule
At 75%, the all-in limit on a $600,000 ARV is $450,000; minus $80,000 of repairs, the maximum offer is $370,000. The $400,000 asking price is $30,000 too high.
Frequently asked questions
What is the 70% rule in real estate?+
The 70% rule is a house-flipping guideline: pay no more than 70% of the after-repair value minus repair costs. On a home worth $300,000 after a $45,000 renovation, the maximum offer is $300,000 × 0.70 − $45,000 = $165,000.
Does the 70% rule include closing and holding costs?+
Not directly. The 30% of ARV left over is meant to cover buying and selling costs, agent commissions, financing, holding costs and profit. If those costs are unusually high, use a lower percentage or run a full flip analysis.
Is the 70% rule still realistic?+
In competitive or high-priced markets many flippers pay 75%–80% of ARV because fixed costs are a smaller share of the price and competition is strong. The trade-off is a thinner margin for repair overruns or a falling market.
How do I estimate after-repair value?+
Look for at least three sold comparables from the past three to six months that are similar in size, age, bedrooms and location and that were renovated to the standard you plan. A local agent or appraiser can help refine the figure.
How is the 70% rule used in wholesaling?+
Wholesalers subtract their assignment fee from the MAO so the investor who buys the contract still pays no more than 70% of ARV minus repairs. The end buyer’s price is the wholesaler’s contract price plus the fee.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.