70% Rule Calculator for Real Estate Investors
The 70% rule says an investor should pay no more than 70% of a property’s after-repair value minus the repair costs. Enter the ARV and repairs to see that maximum, and change the percentage if buyers in your market use a different one.
How the calculation works
- Multiply the ARV by the percentage, 70% by default.
- Subtract the estimated repairs.
- The result is the most a flipper following the rule would pay. The remaining 30% of ARV covers their profit, closing and holding costs.
- Wholesalers subtract their own fee from this number to find their offer; the MAO calculator does that step.
Questions
Is 70% right for every market?
No. Competitive or higher-priced markets often support a higher percentage and slow markets a lower one. Ask your actual buyers what they pay.
Does the 70% rule include closing costs?
Yes, loosely: the 30% left over is meant to cover the investor’s profit plus buying, holding and selling costs. Very expensive renovations or long holds can need more room.
Does the 70% rule work for rentals?
Not well. Landlords price on rent and cash flow, not resale value, so use a rental analysis for buy-and-hold buyers.