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70% Rule Calculator

Estimate a modeled maximum allowable offer for a fix-and-flip scenario using ARV, rehab budget, optional wholesale fee, and rule-percentage assumptions.

The 70% Rule is a screening heuristic, not a valuation method, appraisal, profit guarantee, lender decision, or investment recommendation.

Reviewed by ArvCalc Editorial Team

Last updated: May 2026

This calculator and guide are designed for educational fix-and-flip screening. It estimates a modeled maximum allowable offer, implied rule percentage, offer as a percentage of ARV, gross margin, rule buffer, and scenario sensitivity under user-entered assumptions. Results are screening estimates only. They are not investment advice, lending advice, legal advice, contractor advice, appraisal advice, brokerage advice, or a substitute for full deal underwriting.

On this page

MAO
Not viable

Select screening mode

Enter ARV and Rehab Budget — calculator estimates a modeled Maximum Allowable Offer using the formula MAO = ARV × 70% − Rehab.

Property Inputs

$

Estimated market value after full renovation. Use conservative comps — this is the most critical input.

$

Maximum Allowable Offer

Based on 70% Rule

—

Enter ARV and Rehab Budget above

Three Scenarios at a Glance

Conservative 65% / Standard 70% / Competitive 75% — with your current inputs

Conservative 65%

—

Strong margin, protects against cost overruns

Rehab +10% overrun allowance

Standard 70% ★

—

Industry standard benchmark

Base inputs, no adjustments

Competitive 75%

—

Hot markets — thin margin, verify costs

Competitive market assumption

Sensitivity Table: Percentage × Rehab Variance

MAO at different percentage and rehab combinations

%Rehab −10%Rehab BaseRehab +10%Rehab +20%
65%————
67%————
70%————
72%————
75%————

Note: Intermediate percentages (67%, 72%) show transitions between the 65/70/75 planning assumptions. Main scenarios above use the 65/70/75 trio; this table adds 67% and 72% for finer sensitivity resolution. Amber highlight = your current assumption.

Saved Scenarios

0/20 saved

No saved scenarios yet

Fill in the calculator above, then save your first scenario.

70% Rule Calculator Overview

A screening heuristic for fix-and-flip offer sizing

The 70% Rule Calculator estimates a modeled maximum allowable offer (MAO) for a fix-and-flip scenario using the screening formula: MAO = ARV x Rule % - Rehab - Wholesale Fee (if any). The 70% figure is a commonly cited planning assumption that allocates roughly 30% of ARV toward transaction costs and profit margin. Users can adjust the percentage in Mode 2 to reflect their own assumptions.

This tool offers three modes. Mode 1 (Standard 70%) applies the default percentage for a quick first-pass screen. Mode 2 (Adjustable %) lets you set a custom percentage from 60-80% to match your planning assumptions. Mode 3 (Reverse) takes an actual offer price and shows what percentage rule it implies. The calculator also provides a status badge (screening label only), gross margin, rule buffer, and a sensitivity table under the entered assumptions.

The 70% Rule Calculator can be used as part of a multi-step screening workflow: use the ARV Calculator to estimate After-Repair Value from comparables, then run those values through this tool for a screening estimate, and follow up with the Fix and Flip Calculator for detailed deal modeling with your specific costs.

Important: The 70% Rule is a screening heuristic -- it embeds generalized cost assumptions (financing, holding, selling, profit). Results are screening estimates, not investment advice or profit guarantees. For committed capital decisions, always validate with the Fix and Flip Calculator and consult qualified professionals.

How to Use the 70% Rule Calculator

From ARV estimate to screened maximum offer in 6 steps

1

Enter the After-Repair Value (ARV)

ARV is the estimated market value of the property after all renovations are complete -- not the current as-is value and not the asking price. If you do not have a reliable estimate, use the ARV Calculator first to build it from comparables. Consider pulling 3-5 recent comparable sales within your target area and adjusting for size and condition differences.

2

Enter the Rehab Budget

Enter the total estimated renovation cost to bring the property to ARV condition -- include materials, labor, permits, and a contingency buffer. The calculator classifies rehab scope relative to ARV: cosmetic (0-15%), moderate (15-30%), heavy (30-40%), extensive (40-80%), teardown (>80%). Warnings appear if Rehab exceeds 40% or 80% of ARV.

3

Select a mode (Standard 70% / Adjustable % / Reverse)

Mode 1 applies the default 70% formula. Mode 2 lets you use 60-80% to reflect your own planning assumptions, and includes a benchmark band for comparison. Mode 3 takes your actual offer price and shows what percentage rule it implies.

4

Set optional advanced inputs

The Advanced panel offers a Wholesale Assignment Fee (if wholesaling) and a Financing Buffer toggle (Mode 1 only, subtracts 3% of ARV as a planning assumption for financing costs). The Financing Buffer is disabled in Mode 2 to prevent double-counting -- your custom % already reflects your assumptions.

5

Read the modeled MAO and screening labels

The primary output is Maximum Allowable Offer (MAO) rounded to the nearest $500. The Status Badge (Deep Value / Standard Flip Zone / Competitive Zone / High Risk) is a screening label based on Offer-as-%-of-ARV. Secondary metrics -- Gross Margin (Pre-Cost Buffer) and Rule Buffer -- give dollar context. In Mode 3, you will see Offer % and Implied Rule as two separate metrics.

6

Follow up with detailed analysis

The 70% Rule is a screening tool. Before committing capital on any property, run the full analysis in the Fix and Flip Calculator to model your specific financing, holding, and selling costs. Consult qualified real estate, legal, and financial professionals before making investment decisions.

Pro Tip 1 -- ARV Quality

MAO accuracy depends on ARV accuracy. A 10% ARV error translates to approximately 7% MAO error. Consider pulling multiple recent comps before relying on the output.

Pro Tip 2 -- Percentage Selection

In competitive markets, some investors adjust the rule percentage above 70%. In slower markets or auction scenarios, some use 65% or lower. Use Mode 2 to test different assumptions.

Pro Tip 3 -- Wholesale Role

If wholesaling, enter your Assignment Fee in Advanced inputs. MAO then represents the modeled seller-facing price -- your end-buyer pays MAO + fee, which can be compared against their own screening threshold.

Pro Tip 4 -- Workflow

Suggested workflow: ARV Calculator to estimate value, then import ARV here for screening, then use Fix and Flip Calculator for full deal modeling on scenarios that look promising.

Choosing the Right Mode

Standard 70% (amber) -- Use when:

You want a quick first-pass screening using the default 70% assumption. Suitable for initial screening of listings and off-market leads.

Adjustable % (orange) -- Use when:

You want to test a different percentage assumption. Output includes benchmark band comparison at 65/70/75%. Note: Financing Buffer disabled in this mode (prevents double-counting).

Reverse Mode (purple) -- Use when:

You have an offer price and want to see what percentage rule it implies. Useful for wholesalers checking whether an end-buyer's screening threshold would be met under the entered assumptions.

Inputs and Outputs

What you enter, what the calculator estimates

Inputs

InputRequiredDefault / Source
ARV (After-Repair Value)All modesUser-entered or imported from ARV Calculator
Rehab BudgetAll modesUser-entered renovation estimate
Custom Percentage %Mode 2 only60-80 range, default 70
Your Purchase PriceMode 3 onlyYour actual or proposed offer amount
Wholesale Assignment FeeOptional (all modes)$0 default
Include Financing BufferOptional (Mode 1 only)Off by default; disabled in Mode 2

Outputs

OutputFormulaPurpose
Maximum Allowable Offer (MAO)ARV x % - Rehab - Wholesale FeeModeled screening estimate; rounded to $500; shown only when >0
Status BadgeBased on Offer as % of ARVScreening label: Deep Value / Standard Flip Zone / Competitive Zone / High Risk
Gross Margin (Pre-Cost Buffer)ARV - MAO - RehabModeled dollar buffer for costs + profit under entered assumptions
Rule Buffer (Profit + Costs Allocation)ARV x (1 - %/100)What the percentage buffer is intended to cover (financing, holding, selling, profit)
Offer as % of ARVMAO / ARV x 100Modeled purchase price as a share of ARV. Distinct from Implied Rule in Mode 3.
Implied Rule (Mode 3)(Purchase + Rehab) / ARV x 100Total modeled investment as % of ARV -- different from Status Badge's Offer as % of ARV

How the 70% Rule Calculator Works

The screening formula with a worked example

The 70% Rule Calculator applies a screening formula commonly used in fix-and-flip investing: Maximum Allowable Offer (MAO) = ARV x Rule % - Rehab. The default 70% represents a planning assumption -- roughly 15-20% allocated for transaction costs (financing, holding, selling) and 15-20% for profit margin, totaling a 30% buffer. This calculator adds 3 modes (Standard, Adjustable, Reverse), screening labels, an optional financing buffer, and cross-references to the Fix and Flip Calculator for detailed deal analysis. Results are screening estimates, not final offer prices.

Formula Variants

// Standard 70% Rule (Mode 1)
MAO = ARV x 0.70 - Rehab - Wholesale Fee (if any)
// With Financing Buffer (Mode 1 optional):
MAO = MAO - (ARV x 0.03)
// Adjustable % (Mode 2, 60-80% range)
MAO = ARV x (Custom % / 100) - Rehab - Wholesale Fee
// Financing Buffer NOT available in Mode 2 (prevents double-counting)
// Reverse Mode (Mode 3)
Implied Rule = ((Purchase Price + Rehab) / ARV) x 100
Offer as % of ARV = Purchase Price / ARV x 100 // for Status Badge
// Secondary metrics
Gross Margin (Pre-Cost Buffer) = ARV - MAO - Rehab
Rule Buffer = ARV x (1 - %/100)

Worked Example

Inputs: ARV = $250,000 | Rehab = $30,000 | Mode 1 Standard 70% | No wholesale fee | Financing Buffer off

MAO = $250,000 x 0.70 - $30,000 = $175,000 - $30,000 = $145,000

Gross Margin (Pre-Cost Buffer) = $250,000 - $145,000 - $30,000 = $75,000

Rule Buffer = $250,000 x 0.30 = $75,000

Offer as % of ARV = $145,000 / $250,000 x 100 = 58% -- Screening label: "Deep Value"

Alternative scenario (75% assumption):

MAO = $250,000 x 0.75 - $30,000 = $157,500 | Offer as % of ARV = 63% -- Screening label: "Standard Flip Zone"

Shifting from 70% to 75% raises the modeled MAO by $12,500 and changes the screening label. The Financing Buffer (Mode 1 only) would further adjust by subtracting 3% of ARV ($7,500) as a planning assumption.

* 70% is a commonly used default; Mode 2 allows 60-80% adjustment for different assumptions.

* Mode 3 (Reverse) includes Rehab in the Implied Rule formula, which is why it can differ from the Status Badge's Offer-as-%-of-ARV.

* Financing Buffer (Mode 1 only) is a planning adjustment -- do not combine with Custom % (double-count).

What Is the 70 Percent Rule in Real Estate?

A commonly used screening heuristic for fix-and-flip investors

The 70% Rule is a screening heuristic used by fix-and-flip investors to quickly estimate the maximum they might pay for a distressed property. The formula is MAO = ARV x 0.70 - Rehab. The "70%" represents a planning assumption for a buffer: approximately 15-20% for transaction costs (financing, holding, selling) and 15-20% for profit margin. It has been widely discussed in real estate investing communities and educational materials. This is a screening heuristic, not a valuation method -- for committed capital decisions, use the Fix and Flip Calculator for full deal analysis and consult qualified professionals.

Two different percentages can describe the same deal, and this is often confusing for newer investors. The Offer as % of ARV (MAO / ARV x 100) measures how much of the property's value you would be paying in the purchase price alone. The Implied Rule ((Purchase + Rehab) / ARV x 100) measures your total investment -- purchase price plus renovation -- as a percentage of ARV. Example: ARV $200K, Rehab $30K, offer $110K. Offer as % = 55% (Deep Value label). Implied Rule = 70% (Standard flip territory). Both are correct and measure different aspects of the same scenario.

The 70% Rule was developed in a different interest rate environment. In higher-rate environments, financing costs can consume a larger share of ARV, reducing the effective profit margin within the 30% buffer. This calculator offers a Financing Buffer toggle (Mode 1 only) that subtracts 3% of ARV as a planning adjustment. Alternatively, you can use Mode 2 with a different percentage to reflect your own assumptions. Do not combine both approaches, as that would double-count financing costs.

What Your MAO and Status Badge Mean

Interpreting the screening output

MAO is a modeled ceiling for screening purposes -- not a target price or investment recommendation. The Status Badge is a screening label that reflects how the modeled offer compares to ARV under the entered assumptions. It does not predict profit or account for your specific costs.

Status Badge Tiers (screening labels based on Offer as % of ARV)

≤60%

Deep Value -- GREEN

Screening label indicating a wider modeled buffer. May correspond to auction, foreclosure, or heavily distressed scenarios under the entered assumptions.

60-70%

Standard Flip Zone -- BLUE

Screening label indicating a moderate modeled buffer under the entered assumptions.

70-75%

Competitive Zone -- AMBER

Screening label indicating a thinner modeled buffer. Consider verifying holding and financing cost assumptions before proceeding.

>75%

High Risk -- RED

Screening label indicating a narrow modeled buffer under the entered assumptions. Some investors may consider alternative strategies (such as BRRRR or rental) for scenarios in this range.

Methodology and Assumptions

How the calculator models its estimates

This calculator applies a single-formula screening heuristic. The 70% default is a planning assumption, not a measured market statistic. The 30% buffer is a generalized allocation intended to cover financing costs, holding costs, selling costs, and profit margin -- actual costs vary by deal, market, and investor situation.

The Financing Buffer (Mode 1 only) subtracts an additional 3% of ARV as a planning assumption for financing costs. This is a fixed percentage, not calculated from actual loan terms. For deal-specific financing modeling, use the Fix and Flip Calculator or the Hard Money Loan Calculator.

Status Badge thresholds (60%, 70%, 75%) are fixed screening boundaries built into the calculator. They do not adjust for market conditions, interest rates, or individual deal parameters. They are screening labels only -- not investment ratings or recommendations.

MAO is rounded to the nearest $500 for practical display. Sensitivity tables show how MAO changes across different percentage and rehab variance combinations under the same ARV assumption.

Modeled Planning Scenarios

Illustrative percentage ranges and rehab classifications

These are illustrative planning scenarios -- not measured market data, statistical benchmarks, or predictions for any specific deal. Individual results depend on local conditions, deal source, property condition, and your specific costs.

Percentage Tiers by Scenario Type

PercentageScenario TypeInterpretation
60-65%Conservative assumptionWider modeled buffer; may correspond to less competitive deal sources
65-70%Moderate assumptionCommonly cited range in fix-and-flip educational materials
70-75%Competitive assumptionThinner modeled buffer; verify cost assumptions carefully
75-80%Aggressive assumptionNarrow modeled buffer; some investors consider alternative strategies at this level
>80%Beyond typical flip rangeMay suggest a long-term hold or alternative strategy under these assumptions

Rehab Cost Classification (% of ARV)

  • 0-15% ARV: Cosmetic (paint, flooring, fixtures) -- no warning
  • 15-30% ARV: Moderate (kitchens, baths) -- no warning
  • 30-40% ARV: Heavy (systems, additions) -- amber warning triggered at >40%
  • 40-80% ARV: Extensive (structural, full gut) -- amber warning; consider validating with Fix and Flip Calculator
  • >80% ARV: Teardown/Rebuild -- red warning; the 70% Rule screening heuristic may not be applicable

Strategy and Use Cases

How different investor types may use this screening tool

Beginner Flipper (1-3 deals)

Mode 1 Standard 70% provides a quick first-pass screen with the default assumption. The Financing Buffer option adds a planning adjustment for financing costs. Consider running any scenario that passes screening through the Fix and Flip Calculator for detailed cost modeling before making decisions.

Experienced Flipper (10+ deals)

Mode 2 Adjustable % lets you set a custom percentage reflecting your own cost assumptions and market experience. The Financing Buffer is disabled in Mode 2 to prevent double-counting. The Status Badge provides a quick visual screening label, and the Fix and Flip Calculator can be used for detailed profit modeling.

Wholesaler

Mode 3 Reverse can help check whether an end-buyer's screening threshold would be met under the entered assumptions. Enter the property-under-contract price, Rehab estimate, and ARV to see the Implied Rule. Mode 1 with Wholesale Assignment Fee models the seller-facing price after fee extraction.

Real Estate Agent / Advisor

The 70% Rule screening can help frame investor offer ranges relative to ARV for educational discussions. Mode 2's benchmark band (65/70/75%) shows how different percentage assumptions affect the modeled MAO. The Fix and Flip Calculator provides more detailed analysis for specific deal evaluation.

Hybrid Investor (Flip + BRRRR + Rental)

Mode 3 Reverse can help classify deals by Implied Rule -- scenarios with higher implied percentages may suggest considering alternative strategies such as BRRRR or rental. The Compare Real Estate Deals tool can model the same property inputs across multiple strategy types.

Common Use Cases

Scenarios where this screening tool may be useful

Listing Screening

Enter ARV and estimated Rehab to generate a modeled MAO for comparison against listing or asking prices. This can help identify which properties may merit further analysis with the Fix and Flip Calculator.

Wholesaler Deal Screening

Use Mode 3 Reverse to check what percentage rule an under-contract property implies at your target assignment price. This can help assess whether end-buyers' typical screening thresholds would be met under the entered assumptions.

Auction / Foreclosure Planning

Before an auction, compute a modeled MAO at a conservative percentage (e.g. 65%) as a planning reference. Auction dynamics can differ significantly from the assumptions embedded in any screening formula.

Seller Discussion Framework

The 70% Rule calculation can help frame discussions about investor offer ranges relative to ARV. The formula and cost allocation breakdown can provide educational context for why investor offers differ from retail market value.

Deal Flow Screening

Running incoming deals through the 70% Rule as a first-pass screen can help prioritize which scenarios to analyze in more detail with the Fix and Flip Calculator or other tools.

Industry Context

Where the 70% Rule fits in fix-and-flip analysis

The 70% Rule in Context

The 70% Rule is a widely discussed screening heuristic in fix-and-flip investing communities and educational materials. The 30% buffer is a generalized planning assumption: roughly 15-20% for transaction costs (financing, holding, selling) and 15-20% for profit margin. The specific percentage was developed in a different interest rate environment, and many investors adjust it based on their own market conditions and cost assumptions.

Screening vs. Full Analysis

The 70% Rule is designed for quick first-pass screening. It does not replace detailed deal analysis that models specific financing rates, holding periods, selling costs, and profit projections. Many investors use a screening tool like this to identify which deals merit the time investment of full analysis in tools like the Fix and Flip Calculator.

Multiple Tools Exist

Several platforms and tools implement versions of the 70% Rule. This calculator offers three modes (Standard, Adjustable, Reverse), screening labels, optional financing buffer, and integration with other ArvCalc analysis tools. Investors should evaluate which tools best fit their workflow and analysis needs.

Limitations of the 70% Rule

What this screening tool cannot tell you

Screening heuristic, not full deal analysis

The 70% Rule embeds generalized cost assumptions; your actual financing, holding, and selling costs may differ significantly. Always validate with the Fix and Flip Calculator and consult qualified professionals before committing capital. This is not a substitute for professional deal analysis, appraisal, or investment advice.

Does not model holding time

The 70% Rule does not account for specific holding periods. Longer holds can increase holding costs beyond what the 30% buffer assumption covers. The Fix and Flip Calculator models specific hold time and its cost implications.

Assumes typical rehab scope

The screening formula works within its assumptions for cosmetic to moderate rehab (0-30% of ARV). Heavy rehab (30-40%) may stretch the modeled margins. Extensive rehab (40-80%) and teardown/rebuild scenarios (>80% ARV) may not be well-served by this screening heuristic.

ARV accuracy determines result accuracy

A 10% ARV error translates to approximately 7% MAO error. The quality of the ARV estimate directly affects all calculator outputs. Consider using the ARV Calculator with multiple comparable sales to develop the ARV input.

Fixed screening thresholds

The 70% figure and the status badge thresholds are fixed planning assumptions. They do not adjust for market conditions, interest rate environments, or individual deal parameters. Use Mode 2 to test different percentage assumptions based on your own analysis.

Not a substitute for professional advice

This is an educational and screening tool, not investment advice, legal advice, lending advice, appraisal, or contractor advice. Before committing capital: consult a CPA, attorney, licensed lender, and licensed contractor. The MAO output is a screening estimate under entered assumptions, not a recommendation.

When Not to Use This Calculator

Common Mistakes When Using the 70% Rule

Potential pitfalls to be aware of

1

Overestimating ARV

A common concern: anchoring on the best recent comp rather than considering multiple comparables. Overestimating ARV by 10% inflates the modeled MAO by approximately 7%. Consider using the ARV Calculator with multiple comparables to develop the ARV input.

2

Underestimating Rehab

Rehab estimates that do not account for permits, unforeseen issues, or contingency can lead to modeled results that appear more favorable than actual deal economics. Consider obtaining contractor bids and including a contingency buffer in your rehab estimate.

3

Treating 70% as a fixed rule

70% is a planning assumption, not a universal constant. Different market conditions, deal sources, and cost structures may call for different percentage assumptions. Mode 2 allows testing 60-80% to reflect your own analysis.

4

Double-counting financing costs

Using the Financing Buffer (Mode 1) and a Custom % (Mode 2) can both account for financing costs. The calculator prevents this by disabling the Financing Buffer in Mode 2. Choose one adjustment method, not both.

5

Using screening results as final analysis

The 70% Rule is a first-pass screening tool, not a substitute for detailed deal analysis. Before making investment decisions, consider running scenarios through the Fix and Flip Calculator to model specific financing, holding, and selling costs. Consult qualified professionals before committing capital.

Frequently Asked Questions

Common questions about the 70% Rule

Related Calculators

Other screening and analysis tools

ARV

ARV Calculator

Estimate After-Repair Value using comparable sales data. Can be used to generate the ARV input for this calculator.

F&F

Fix and Flip Calculator

Detailed deal analysis with financing, holding, and selling cost modeling. For scenarios that pass initial screening.

BRR

BRRRR Calculator

Buy-Rehab-Rent-Refi-Repeat analysis for scenarios where a long-term hold may be considered.

CMP

Compare Real Estate Deals

Side-by-side comparison of different strategy models for the same property inputs.

CAP

Cap Rate Calculator

Capitalization rate estimation for income-producing properties.

HML

Hard Money Loan Calculator

Estimate total financing cost, points, interest, and cash needed under entered loan assumptions.

RCE

Rehab Cost Estimator

Estimate renovation budget with hard/soft costs and contingency. Can generate the rehab input for this calculator.

Guide: Fix and Flip CalculatorGuide: After Repair Value (ARV)

Disclaimer: This 70% Rule Calculator is for educational and screening purposes only. All outputs -- including MAO, status badges, gross margin, rule buffer, implied rule percentage, and sensitivity estimates -- are modeled screening results based on user-entered assumptions. They are not investment advice, appraisals, profit guarantees, lending decisions, legal advice, or contractor estimates. The 70% figure is a planning assumption, not a measured market statistic. Always consult a licensed real estate professional, CPA, attorney, licensed lender, and licensed contractor before committing capital to any real estate investment. Past performance of any screening heuristic does not guarantee future results.