{"id":626,"date":"2026-07-26T00:46:26","date_gmt":"2026-07-26T04:46:26","guid":{"rendered":"https:\/\/arvcalc.com\/blog\/70-rule-calculator-how-to-calculate-max-offer-for-flips-2026\/"},"modified":"2026-07-26T01:57:11","modified_gmt":"2026-07-26T05:57:11","slug":"70-rule-calculator-guide","status":"publish","type":"post","link":"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/","title":{"rendered":"70 Rule Calculator: How to Calculate Max Offer for Flips (2026)"},"content":{"rendered":"<p><!-- FAQPage JSON-LD Schema --><br \/>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the 70 rule calculator used for?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"A 70 rule calculator helps house flippers determine the maximum allowable offer (MAO) using the 70 rule calculator they should pay for a property. It applies the formula: MAO = ARV \u00d7 70% \u2212 Rehab Cost. This ensures the flipper has enough margin to cover holding costs, closing costs, agent commissions, and still earn a profit.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What does ARV mean in the 70% rule?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"ARV stands for After Repair Value \u2014 the estimated market value of the property after all renovations are complete. It is the most critical input in the 70% rule formula. Overestimating ARV is the single most common mistake that causes flips to lose money.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Does the 70% rule include rehab costs?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. The full formula is MAO = ARV \u00d7 70% \u2212 Rehab Cost. The 30% buffer built into the rule is designed to cover all transaction costs (buying and selling closing costs, agent commissions, holding costs like taxes, insurance, and utilities) plus your profit. Rehab costs are subtracted separately.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"When should I use 65% instead of 70%?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Use 65% when you are a first-time flipper, the rehab is extensive or uncertain, the market is softening, carrying costs are high (expensive loans, long timelines), or you are flipping in a volatile market like Austin, TX where values swing quickly. The lower percentage gives you a larger safety cushion.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Can I use 75% instead of 70%?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Experienced flippers in strong seller's markets with highly accurate ARV data, minimal rehab scopes, and access to cheap capital sometimes use 75%. However, this compresses your margin significantly. A single unexpected repair or a 30-day increase in days-on-market can erase your profit entirely. Only use 75% if you have a proven track record and reliable cost data.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is a good profit on a house flip?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"According to ATTOM Data Solutions, the average gross profit on a house flip in the United States in 2024 was approximately $73,500, representing a gross ROI of around 27\u201330%. Net profit after all costs typically ranges from $25,000 to $50,000 per deal for well-executed flips. The 70% rule is designed to protect at least 20\u201325% net margin.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Does the 70% rule work in expensive markets like California?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"The 70% rule is harder to apply in very high-cost markets because sellers rarely accept offers 30% below after-repair value. Many California flippers use a deal-by-deal cost stack analysis instead \u2014 adding up every cost (purchase, rehab, holding, commissions, closing) and then backing out the required profit to determine max offer. Our fix-and-flip calculator can model this precisely.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n<p><!-- Article Body --><\/p>\n<article>\n<p>You found a distressed property listed at $162,000. The neighborhood comps suggest it could sell for $285,000 after a full renovation. Your contractor quotes $55,000 for the rehab. The question every house flipper faces in that moment: <strong>is this deal worth making an offer on \u2014 and if so, how much?<\/strong> That is exactly what a <strong>70 rule calculator<\/strong> is built to answer. Punch in your After Repair Value and your estimated rehab cost, and the <strong>70 percent rule calculator<\/strong> tells you the highest price you can pay and still walk away with a healthy profit. No guesswork. No wishful math. Just a hard ceiling that keeps you from buying your way into a loss.<\/p>\n<p>This guide explains the formula, walks through three complete worked examples with full profit breakdowns, shows you when to adjust the percentage up or down, and covers the five most common mistakes that cause flippers to blow past their numbers. If you want to run the numbers right now, head to the <a href=\"\/70-percent-rule-calculator\">free 70 percent rule calculator<\/a> on ArvCalc \u2014 it handles everything in this article in under 60 seconds.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/07\/70rule-cover.jpg\" alt=\"70 rule calculator showing ARV, rehab cost, and maximum allowable offer formula for house flipping\" style=\"width:100%; border-radius:12px; margin-bottom:24px;\" \/><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_83 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#What_Is_the_70_Rule_Calculator_and_Why_Does_It_Matter\" >What Is the 70 Rule Calculator and Why Does It Matter?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#The_Formula_MAO_ARV_%C3%97_70_%E2%88%92_Rehab_Cost\" >The Formula: MAO = ARV \u00d7 70% \u2212 Rehab Cost<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Worked_Example_1_Houston_TX_%E2%80%94_Single-Family_Rental_Flip\" >Worked Example 1: Houston, TX \u2014 Single-Family Rental Flip<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Inputs\" >Inputs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Step_1_%E2%80%94_Calculate_MAO\" >Step 1 \u2014 Calculate MAO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Step_2_%E2%80%94_Full_Profit_Analysis_at_MAO_144500\" >Step 2 \u2014 Full Profit Analysis at MAO ($144,500)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Worked_Example_2_Jacksonville_FL_%E2%80%94_What_Happens_When_You_Overpay\" >Worked Example 2: Jacksonville, FL \u2014 What Happens When You Overpay<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Inputs-2\" >Inputs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Correct_MAO\" >Correct MAO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Scenario_A_You_Buy_at_MAO_126000\" >Scenario A: You Buy at MAO ($126,000)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Scenario_B_You_Pay_145000_Overpay_by_19000\" >Scenario B: You Pay $145,000 (Overpay by $19,000)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Worked_Example_3_High-ARV_Market_%E2%80%94_Why_Austin_Needs_a_Different_Number\" >Worked Example 3: High-ARV Market \u2014 Why Austin Needs a Different Number<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Austin_TX_%E2%80%94_Inputs\" >Austin, TX \u2014 Inputs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#MAO_at_70\" >MAO at 70%<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Cost_Stack_at_70\" >Cost Stack at 70%<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#MAO_at_65_for_Austin\" >MAO at 65% for Austin<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#70_Percent_Rule_Calculator_When_to_Use_65_70_or_75\" >70 Percent Rule Calculator: When to Use 65%, 70%, or 75%<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Use_65_When\" >Use 65% When:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Use_70_When\" >Use 70% When:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Use_75_When\" >Use 75% When:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#What_the_30_Buffer_in_the_70_Rule_Calculator_Really_Covers\" >What the 30% Buffer in the 70 Rule Calculator Really Covers<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Buying_Closing_Costs_15%E2%80%933_of_purchase_price\" >Buying Closing Costs (1.5\u20133% of purchase price)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Holding_Costs_1%E2%80%932_of_ARV_per_month\" >Holding Costs (1\u20132% of ARV per month)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Selling_Closing_Costs_1%E2%80%932_of_sale_price\" >Selling Closing Costs (1\u20132% of sale price)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Agent_Commissions_5%E2%80%936_of_sale_price\" >Agent Commissions (5\u20136% of sale price)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Profit\" >Profit<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#5_Mistakes_Flippers_Make_With_the_70_Rule_Calculator\" >5 Mistakes Flippers Make With the 70 Rule Calculator<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Mistake_1_Overestimating_ARV\" >Mistake 1: Overestimating ARV<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Mistake_2_Underestimating_Rehab_Costs\" >Mistake 2: Underestimating Rehab Costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Mistake_3_Ignoring_Holding_Costs\" >Mistake 3: Ignoring Holding Costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Mistake_4_Forgetting_Closing_Costs_on_Both_Sides\" >Mistake 4: Forgetting Closing Costs on Both Sides<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Mistake_5_Applying_the_Rule_in_the_Wrong_Market\" >Mistake 5: Applying the Rule in the Wrong Market<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Using_the_70_Rule_Calculator_for_BRRRR_Deals\" >Using the 70 Rule Calculator for BRRRR Deals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Related_Calculators_and_Tools\" >Related Calculators and Tools<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/arvcalc.com\/blog\/70-rule-calculator-guide\/#Bottom_Line_When_the_70_Rule_Calculator_Works_and_When_It_Doesnt\" >Bottom Line: When the 70 Rule Calculator Works (and When It Doesn&#8217;t)<\/a><\/li><\/ul><\/nav><\/div>\n<h2 id=\"what-is-the-70-rule-calculator\"><span class=\"ez-toc-section\" id=\"What_Is_the_70_Rule_Calculator_and_Why_Does_It_Matter\"><\/span>What Is the 70 Rule Calculator and Why Does It Matter?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 70 rule calculator applies the foundational pricing rule of residential real estate flipping. It states that a flipper should pay no more than 70% of a property&#8217;s After Repair Value, minus the cost of repairs. The rule exists because a real estate transaction is expensive on both ends. When you buy a property and later sell it, you face two sets of closing costs, months of holding costs, and agent commissions that can run 5\u20136% of the sale price. The 30% buffer built into the rule is designed to absorb all of those costs while leaving meaningful profit.<\/p>\n<p>The <strong>70 rule calculator<\/strong> automates this formula so you can evaluate deals in seconds rather than building a spreadsheet from scratch each time. Whether you are analyzing your first flip or your fiftieth, a consistent calculation tool removes emotion from the process and forces discipline on offer prices.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Formula_MAO_ARV_%C3%97_70_%E2%88%92_Rehab_Cost\"><\/span>The Formula: MAO = ARV \u00d7 70% \u2212 Rehab Cost<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Maximum Allowable Offer formula has three components:<\/p>\n<ul>\n<li><strong>ARV (After Repair Value):<\/strong> The market value of the property after all planned renovations are complete, based on recent comparable sales in the same neighborhood. This is the most important and most frequently misjudged number in the formula. Use the <a href=\"\/arv-calculator\">ARV calculator<\/a> to build your comp analysis before plugging a number in.<\/li>\n<li><strong>70%:<\/strong> The multiplier. It means you are targeting a purchase price that represents, at most, 70 cents on every dollar of finished value. The remaining 30% covers transaction costs, holding costs, and your profit.<\/li>\n<li><strong>Rehab Cost:<\/strong> The total estimated cost of all repairs, upgrades, and carrying costs during renovation \u2014 materials, labor, permits. Use a detailed <a href=\"\/blog\/rehab-cost-estimator-guide\/\">rehab cost estimator<\/a> to build this number room by room before making an offer.<\/li>\n<\/ul>\n<p>Put it together: <strong>MAO = ARV \u00d7 0.70 \u2212 Rehab Cost<\/strong><\/p>\n<p>If the seller is asking more than your MAO, the deal does not work at that price. Either negotiate down, find a way to increase the ARV, reduce the rehab scope, or walk away.<\/p>\n<h2 id=\"worked-example-1\"><span class=\"ez-toc-section\" id=\"Worked_Example_1_Houston_TX_%E2%80%94_Single-Family_Rental_Flip\"><\/span>Worked Example 1: Houston, TX \u2014 Single-Family Rental Flip<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is the scenario from the opening paragraph. Here are the full numbers.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Inputs\"><\/span>Inputs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>ARV: $285,000<\/li>\n<li>Rehab cost: $55,000<\/li>\n<li>Listing price: $162,000<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Step_1_%E2%80%94_Calculate_MAO\"><\/span>Step 1 \u2014 Calculate MAO<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MAO = $285,000 \u00d7 0.70 \u2212 $55,000<br \/>\nMAO = $199,500 \u2212 $55,000<br \/>\n<strong>MAO = $144,500<\/strong><\/p>\n<p>The listing price of $162,000 is above your MAO of $144,500. That does not mean you should not make an offer \u2014 it means you need to negotiate to $144,500 or below for the deal to work under the 70 rule calculator. If the seller will not go below $150,000, the math does not close and you need to walk away.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Step_2_%E2%80%94_Full_Profit_Analysis_at_MAO_144500\"><\/span>Step 2 \u2014 Full Profit Analysis at MAO ($144,500)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<th>Item<\/th>\n<th>Amount<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Purchase price (MAO)<\/td>\n<td>$144,500<\/td>\n<\/tr>\n<tr>\n<td>Rehab cost<\/td>\n<td>$55,000<\/td>\n<\/tr>\n<tr>\n<td>Buying closing costs (2%)<\/td>\n<td>$2,890<\/td>\n<\/tr>\n<tr>\n<td>Holding costs (5 months: taxes, insurance, utilities, loan interest)<\/td>\n<td>$7,125<\/td>\n<\/tr>\n<tr>\n<td>Selling closing costs (1.5%)<\/td>\n<td>$4,275<\/td>\n<\/tr>\n<tr>\n<td>Agent commissions (5.5% of ARV)<\/td>\n<td>$15,675<\/td>\n<\/tr>\n<tr>\n<td><strong>Total cost basis<\/strong><\/td>\n<td><strong>$229,465<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Sale price (ARV)<\/td>\n<td>$285,000<\/td>\n<\/tr>\n<tr>\n<td><strong>Gross profit<\/strong><\/td>\n<td><strong>$55,535<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Net ROI on invested capital<\/td>\n<td>~24%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>At MAO, this deal produces a gross profit of $55,535 \u2014 a solid return that accounts for all the real costs of the transaction. Notice that holding costs and commissions alone add up to nearly $23,000. That is exactly why the 30% buffer exists and why you cannot simply subtract rehab from ARV and call it profit. For a deeper breakdown of how these costs stack up, the <a href=\"\/fix-and-flip-calculator\">fix and flip calculator<\/a> lets you model every line item individually.<\/p>\n<h2 id=\"worked-example-2\"><span class=\"ez-toc-section\" id=\"Worked_Example_2_Jacksonville_FL_%E2%80%94_What_Happens_When_You_Overpay\"><\/span>Worked Example 2: Jacksonville, FL \u2014 What Happens When You Overpay<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The second example is a warning. Jacksonville has been one of the more active flip markets in the Southeast, but tight inventory in 2025\u20132026 has pushed up acquisition prices. Here is a deal that looks close but quietly destroys your profit.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Inputs-2\"><\/span>Inputs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>ARV: $230,000<\/li>\n<li>Rehab cost: $35,000<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Correct_MAO\"><\/span>Correct MAO<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MAO = $230,000 \u00d7 0.70 \u2212 $35,000<br \/>\nMAO = $161,000 \u2212 $35,000<br \/>\n<strong>MAO = $126,000<\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Scenario_A_You_Buy_at_MAO_126000\"><\/span>Scenario A: You Buy at MAO ($126,000)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<th>Item<\/th>\n<th>Amount<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Purchase<\/td>\n<td>$126,000<\/td>\n<\/tr>\n<tr>\n<td>Rehab<\/td>\n<td>$35,000<\/td>\n<\/tr>\n<tr>\n<td>Buying closing costs (2%)<\/td>\n<td>$2,520<\/td>\n<\/tr>\n<tr>\n<td>Holding costs (4 months)<\/td>\n<td>$4,800<\/td>\n<\/tr>\n<tr>\n<td>Selling closing costs + commissions (7%)<\/td>\n<td>$16,100<\/td>\n<\/tr>\n<tr>\n<td><strong>Total cost basis<\/strong><\/td>\n<td><strong>$184,420<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Sale price<\/td>\n<td>$230,000<\/td>\n<\/tr>\n<tr>\n<td><strong>Gross profit<\/strong><\/td>\n<td><strong>$45,580<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Scenario_B_You_Pay_145000_Overpay_by_19000\"><\/span>Scenario B: You Pay $145,000 (Overpay by $19,000)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<th>Item<\/th>\n<th>Amount<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Purchase<\/td>\n<td>$145,000<\/td>\n<\/tr>\n<tr>\n<td>Rehab<\/td>\n<td>$35,000<\/td>\n<\/tr>\n<tr>\n<td>Buying closing costs (2%)<\/td>\n<td>$2,900<\/td>\n<\/tr>\n<tr>\n<td>Holding costs (4 months)<\/td>\n<td>$4,800<\/td>\n<\/tr>\n<tr>\n<td>Selling closing costs + commissions (7%)<\/td>\n<td>$16,100<\/td>\n<\/tr>\n<tr>\n<td><strong>Total cost basis<\/strong><\/td>\n<td><strong>$203,800<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Sale price<\/td>\n<td>$230,000<\/td>\n<\/tr>\n<tr>\n<td><strong>Gross profit<\/strong><\/td>\n<td><strong>$26,200<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>By paying $19,000 over MAO, your gross profit drops from $45,580 to $26,200 \u2014 a 43% reduction. And that is before any rehab surprises, market softening, or longer-than-expected time on market. Overpaying by what feels like &#8220;a little&#8221; is how experienced flippers end up with thin deals and beginners end up with losses. The <a href=\"\/blog\/maximum-allowable-offer-calculator\/\">maximum allowable offer calculator guide<\/a> has more on building discipline around your offer ceiling.<\/p>\n<h2 id=\"worked-example-3\"><span class=\"ez-toc-section\" id=\"Worked_Example_3_High-ARV_Market_%E2%80%94_Why_Austin_Needs_a_Different_Number\"><\/span>Worked Example 3: High-ARV Market \u2014 Why Austin Needs a Different Number<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 70% rule was developed in mid-range markets where transaction costs are a relatively stable percentage of property value. In high-cost markets, the math changes \u2014 not because the rule is wrong, but because the real cost percentages shift.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Austin_TX_%E2%80%94_Inputs\"><\/span>Austin, TX \u2014 Inputs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>ARV: $550,000<\/li>\n<li>Rehab cost: $80,000<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"MAO_at_70\"><\/span>MAO at 70%<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MAO = $550,000 \u00d7 0.70 \u2212 $80,000 = $385,000 \u2212 $80,000 = <strong>$305,000<\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cost_Stack_at_70\"><\/span>Cost Stack at 70%<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<th>Item<\/th>\n<th>Amount<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Purchase<\/td>\n<td>$305,000<\/td>\n<\/tr>\n<tr>\n<td>Rehab<\/td>\n<td>$80,000<\/td>\n<\/tr>\n<tr>\n<td>Buying closing costs (2%)<\/td>\n<td>$6,100<\/td>\n<\/tr>\n<tr>\n<td>Holding costs (6 months \u2014 Austin DOM is high)<\/td>\n<td>$19,800<\/td>\n<\/tr>\n<tr>\n<td>Selling closing costs + commissions (6.5%)<\/td>\n<td>$35,750<\/td>\n<\/tr>\n<tr>\n<td><strong>Total cost basis<\/strong><\/td>\n<td><strong>$446,650<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Sale price<\/td>\n<td>$550,000<\/td>\n<\/tr>\n<tr>\n<td><strong>Gross profit at 70%<\/strong><\/td>\n<td><strong>$103,350<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>At first glance, $103,350 looks great. But look at what happens if the ARV is off by just 5% \u2014 a common outcome in a volatile market like Austin where prices shifted 15\u201320% between 2022 and 2024 according to <a href=\"https:\/\/www.redfin.com\/city\/30818\/TX\/Austin\/housing-market\" target=\"_blank\" rel=\"noopener\">Redfin&#8217;s Austin market data<\/a>:<\/p>\n<ul>\n<li>Revised ARV: $522,500 (5% lower)<\/li>\n<li>Total cost basis: $446,650 (unchanged)<\/li>\n<li>Gross profit: $75,850 \u2014 still workable, but your margin just dropped 27%<\/li>\n<\/ul>\n<p>Now add a 10% rehab overrun ($8,000) and one extra month of holding ($3,300) \u2014 your profit is down to $64,550, roughly 12% of ARV. In a high-volatility market, that is not enough cushion. <strong>For Austin and similar markets, experienced investors use 65% instead of 70%.<\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"MAO_at_65_for_Austin\"><\/span>MAO at 65% for Austin<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MAO = $550,000 \u00d7 0.65 \u2212 $80,000 = $357,500 \u2212 $80,000 = <strong>$277,500<\/strong><\/p>\n<p>The lower offer price is harder to get accepted \u2014 but it is the only way to maintain adequate margin when market volatility is high and days-on-market stretch longer. The <a href=\"\/blog\/after-repair-value-calculator-guide\/\">after repair value calculator guide<\/a> covers how to comp accurately in fast-moving markets.<\/p>\n<h2 id=\"when-to-adjust-the-percentage\"><span class=\"ez-toc-section\" id=\"70_Percent_Rule_Calculator_When_to_Use_65_70_or_75\"><\/span>70 Percent Rule Calculator: When to Use 65%, 70%, or 75%<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 70% figure is not sacred. It is a starting point that gets modified based on your experience, market conditions, and the specific risk profile of each deal. According to the <a href=\"https:\/\/www.nar.realtor\/research-and-statistics\/housing-statistics\/realtors-confidence-index\" target=\"_blank\" rel=\"noopener\">National Association of Realtors<\/a>, market conditions vary significantly by region \u2014 and your multiplier should reflect that reality.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Use_65_When\"><\/span>Use 65% When:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>You are completing your first or second flip and your rehab estimates may be off<\/li>\n<li>The rehab is extensive (full gut renovation, foundation work, roof replacement)<\/li>\n<li>The market is softening or inventory is rising<\/li>\n<li>Days on market in your area are trending upward<\/li>\n<li>Your financing is expensive (hard money above 12% or bridge loans with high fees)<\/li>\n<li>The property is in an unfamiliar submarket<\/li>\n<li>You are flipping in a high-cost, high-volatility market (Austin, Denver, parts of Florida)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Use_70_When\"><\/span>Use 70% When:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>You have completed several deals and your cost estimates are consistently accurate<\/li>\n<li>The rehab is light to moderate (cosmetic updates, kitchen and bath refresh)<\/li>\n<li>The market is stable with predictable days on market<\/li>\n<li>Comps are plentiful and consistent within a narrow range<\/li>\n<li>Your financing costs are moderate<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Use_75_When\"><\/span>Use 75% When:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>You are an experienced flipper with a long track record and reliable contractor relationships<\/li>\n<li>The rehab scope is minimal and well-defined (paint and carpet only)<\/li>\n<li>You have access to cheap capital (in-house funds or low-cost private money)<\/li>\n<li>The market is very strong and inventory is low \u2014 bidding wars are common even on distressed properties<\/li>\n<li>Your ARV is confirmed by multiple recent, near-identical comparable sales<\/li>\n<\/ul>\n<p><strong>A note on the 75% rule:<\/strong> At 75%, you have compressed your safety margin to 25%. One unexpected structural issue, one month of extra holding time, or a slight market shift can eliminate your profit entirely. Most professional investors reserve 75% for cosmetic flips in core markets where they have deep data and a buyer&#8217;s agent already lined up before renovation begins. The <a href=\"\/blog\/fix-and-flip-guide\/\">complete fix and flip guide<\/a> covers deal-by-deal risk assessment in more detail.<\/p>\n<h2 id=\"what-the-30-percent-covers\"><span class=\"ez-toc-section\" id=\"What_the_30_Buffer_in_the_70_Rule_Calculator_Really_Covers\"><\/span>What the 30% Buffer in the 70 Rule Calculator Really Covers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Understanding why the 30% buffer exists makes you a better flipper. Here is what it needs to cover on a typical deal:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Buying_Closing_Costs_15%E2%80%933_of_purchase_price\"><\/span>Buying Closing Costs (1.5\u20133% of purchase price)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Title insurance, escrow fees, lender origination fees, recording fees, inspections, and appraisals. On a $144,500 purchase, expect $2,000\u2013$4,000 in closing costs. These are paid out of pocket on the day you close on acquisition.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Holding_Costs_1%E2%80%932_of_ARV_per_month\"><\/span>Holding Costs (1\u20132% of ARV per month)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Every month the property sits \u2014 during renovation and while on the market \u2014 costs money. Property taxes, homeowner&#8217;s insurance, utilities, security, and most critically, loan interest. If you financed with a hard money loan at 11% interest on a $150,000 balance, that is $1,375 per month in interest alone. Over six months, that is $8,250 before you pay a single dollar in taxes or insurance. Use the <a href=\"\/blog\/cost-to-rehab-a-house\/\">cost to rehab a house guide<\/a> to factor in realistic timelines when estimating holding costs.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Selling_Closing_Costs_1%E2%80%932_of_sale_price\"><\/span>Selling Closing Costs (1\u20132% of sale price)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Title, escrow, transfer taxes, and recording fees on the sell side. These are often overlooked by first-time flippers who focus only on acquisition costs.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Agent_Commissions_5%E2%80%936_of_sale_price\"><\/span>Agent Commissions (5\u20136% of sale price)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is typically the largest single cost after rehab. Even after the NAR settlement of 2024 changed how buyer&#8217;s agent commissions are disclosed, most sellers still need to offer competitive buyer&#8217;s agent compensation to attract offers. The <a href=\"https:\/\/www.nar.realtor\/the-facts\" target=\"_blank\" rel=\"noopener\">NAR commission data<\/a> shows total transaction commissions averaging 5\u20136% in most markets. On a $285,000 sale, that is $14,250\u2013$17,100.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Profit\"><\/span>Profit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After all costs, your target is 10\u201320% of ARV as net profit. The 70% rule, when applied correctly, delivers this range on most deals. To see how all these numbers interact in real time, use the <a href=\"\/fix-and-flip-calculator\">fix and flip calculator<\/a> with itemized cost inputs.<\/p>\n<h2 id=\"5-mistakes\"><span class=\"ez-toc-section\" id=\"5_Mistakes_Flippers_Make_With_the_70_Rule_Calculator\"><\/span>5 Mistakes Flippers Make With the 70 Rule Calculator<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The formula is simple. The execution is not. These are the five mistakes that cause even experienced investors to lose money on deals that looked good on paper.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mistake_1_Overestimating_ARV\"><\/span>Mistake 1: Overestimating ARV<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>ARV is not what you hope the house will sell for \u2014 it is what comparable homes in the same neighborhood, in similar condition, have sold for in the last 90 days. The most common error is using a comp that is larger, newer, or located on a better street. A 5% overestimate in ARV on a $285,000 property adds $14,250 to your projected profit that does not exist. Always pull 5\u201310 comps and use the median, not the high end. The <a href=\"\/arv-calculator\">ARV calculator<\/a> helps you weight comps by square footage, age, and proximity.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mistake_2_Underestimating_Rehab_Costs\"><\/span>Mistake 2: Underestimating Rehab Costs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Contractors give optimistic estimates. Walls opened up reveal hidden problems. Material prices change. Labor is scarce. Add a 10\u201315% contingency buffer to every rehab estimate and build it into your MAO calculation, not as an afterthought. According to the <a href=\"https:\/\/www.census.gov\/construction\/c30\/c30index.html\" target=\"_blank\" rel=\"noopener\">U.S. Census Bureau&#8217;s construction cost data<\/a>, residential construction costs have risen significantly since 2020, making older rehab estimates especially unreliable. The <a href=\"\/blog\/rehab-cost-estimator-guide\/\">rehab cost estimator guide<\/a> has a room-by-room checklist to prevent omissions.<\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mistake_3_Ignoring_Holding_Costs\"><\/span>Mistake 3: Ignoring Holding Costs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>New flippers often calculate: Purchase + Rehab = Total Cost. They completely forget that the property costs money every month it is owned. If your renovation takes four months and the property then sits on the market for two months, you have six months of property taxes, insurance, utilities, and loan interest. On a $150,000 hard money loan, that six-month interest cost alone can exceed $9,000\u2013$12,000. These costs must be included in your total cost stack before you calculate MAO. The <a href=\"\/blog\/house-flipping-profit-calculator-guide\/\">house flipping profit calculator guide<\/a> has a full breakdown of how holding costs affect net returns.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mistake_4_Forgetting_Closing_Costs_on_Both_Sides\"><\/span>Mistake 4: Forgetting Closing Costs on Both Sides<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Every real estate transaction has two closing events \u2014 acquisition and disposition. First-time flippers often budget for one set of closing costs and forget the other. Combined, buying and selling closing costs typically add 3\u20135% of the transaction values. On a $285,000 sale with a $144,500 purchase, that is roughly $6,000\u2013$10,000 in total closing costs that must come out of your profit. These are non-negotiable and non-avoidable. Always include them in your cost stack before you make an offer.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mistake_5_Applying_the_Rule_in_the_Wrong_Market\"><\/span>Mistake 5: Applying the Rule in the Wrong Market<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The 70% rule was calibrated for the typical U.S. residential market \u2014 properties in the $150,000\u2013$400,000 range in mid-tier cities. It does not work as a simple input in very low-cost markets (where fixed transaction costs represent a higher percentage of the deal) or very high-cost markets (where price volatility can swing ARV by 10\u201315% in either direction). In these markets, build a full itemized cost stack and back out your MAO from required profit \u2014 do not just multiply by 0.70. The <a href=\"\/blog\/70-percent-rule-real-estate-flipping-guide\/\">70 percent rule real estate flipping guide<\/a> covers market-specific adjustments in depth.<\/p>\n<h2 id=\"brrrr-strategy\"><span class=\"ez-toc-section\" id=\"Using_the_70_Rule_Calculator_for_BRRRR_Deals\"><\/span>Using the 70 Rule Calculator for BRRRR Deals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Buy-Rehab-Rent-Refinance-Repeat strategy uses the same acquisition discipline as flipping, but the exit is a cash-out refinance rather than a sale. The 70% rule applies at acquisition, but your refinance ceiling is typically 75\u201380% of ARV (depending on lender). To model BRRRR deals, you need both the acquisition side (MAO) and the refinance side (maximum loan amount). The <a href=\"\/brrrr-calculator\">BRRRR calculator<\/a> handles both calculations and shows your monthly cash flow after refinance. The 70% rule at acquisition ensures you have enough equity to execute the refinance without bringing extra cash to the table.<\/p>\n<h2 id=\"faq\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<details open>\n<summary><strong>What is the 70 rule calculator used for?<\/strong><\/summary>\n<p>A 70 rule calculator helps house flippers determine the maximum allowable offer (MAO) they should pay for a property. It applies the formula: MAO = ARV \u00d7 70% \u2212 Rehab Cost. This ensures the flipper has enough margin to cover holding costs, closing costs, agent commissions, and still earn a profit.<\/p>\n<\/details>\n<details>\n<summary><strong>What does ARV mean in the 70% rule?<\/strong><\/summary>\n<p>ARV stands for After Repair Value \u2014 the estimated market value of the property after all planned renovations are complete, based on recent comparable sales in the same neighborhood. It is the most critical input in the 70% rule formula. Overestimating ARV is the single most common mistake that causes flips to lose money.<\/p>\n<\/details>\n<details>\n<summary><strong>Does the 70% rule include rehab costs?<\/strong><\/summary>\n<p>Yes. The full formula is MAO = ARV \u00d7 70% \u2212 Rehab Cost. The 30% buffer built into the rule is designed to cover all transaction costs (buying and selling closing costs, agent commissions, holding costs like taxes, insurance, and utilities) plus your profit. Rehab costs are subtracted separately.<\/p>\n<\/details>\n<details>\n<summary><strong>When should I use 65% instead of 70%?<\/strong><\/summary>\n<p>Use 65% when you are a first-time flipper, the rehab is extensive or uncertain, the market is softening, carrying costs are high (expensive loans, long timelines), or you are flipping in a volatile market like Austin, TX where values swing quickly. The lower percentage gives you a larger safety cushion.<\/p>\n<\/details>\n<details>\n<summary><strong>Can I use 75% instead of 70%?<\/strong><\/summary>\n<p>Experienced flippers in strong seller&#8217;s markets with highly accurate ARV data, minimal rehab scopes, and access to cheap capital sometimes use 75%. However, this compresses your margin significantly. A single unexpected repair or a 30-day increase in days-on-market can erase your profit entirely. Only use 75% if you have a proven track record and reliable cost data.<\/p>\n<\/details>\n<details>\n<summary><strong>What is a good profit on a house flip?<\/strong><\/summary>\n<p>According to ATTOM Data Solutions, the average gross profit on a house flip in the United States in 2024 was approximately $73,500, representing a gross ROI of around 27\u201330%. Net profit after all costs typically ranges from $25,000 to $50,000 per deal for well-executed flips. The 70% rule is designed to protect at least 20\u201325% net margin.<\/p>\n<\/details>\n<details>\n<summary><strong>Does the 70% rule work in expensive markets like California?<\/strong><\/summary>\n<p>The 70% rule is harder to apply in very high-cost markets because sellers rarely accept offers 30% below after-repair value. Many California flippers use a deal-by-deal cost stack analysis instead \u2014 adding up every cost (purchase, rehab, holding, commissions, closing) and then backing out the required profit to determine max offer. Our <a href=\"\/fix-and-flip-calculator\">fix-and-flip calculator<\/a> can model this precisely.<\/p>\n<\/details>\n<div style=\"background: #f0f9ff; border: 2px solid #bfdbfe; border-radius: 12px; padding: 20px; margin: 32px 0;\">\n<p style=\"font-weight: bold; color: #1e3a5f; margin-bottom: 8px;\">This guide focuses on calculator mechanics and worked examples.<\/p>\n<p style=\"font-size: 14px; color: #4b5563;\">For advanced market-by-market strategies, historical context, and when the 70% rule breaks down, see our <a href=\"\/blog\/70-percent-rule-real-estate-flipping-guide\/\" style=\"font-weight: bold;\">70% Rule Strategy Guide: Complete Real Estate Flipping Reference<\/a>.<\/p>\n<\/div>\n<h2 id=\"related-calculators\"><span class=\"ez-toc-section\" id=\"Related_Calculators_and_Tools\"><\/span>Related Calculators and Tools<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 70 rule calculator is your starting point for evaluating any flip deal. Once you have your MAO, these tools help you build out the complete deal analysis:<\/p>\n<ul>\n<li><a href=\"\/70-percent-rule-calculator\"><strong>70% Rule Calculator<\/strong><\/a> \u2014 Instant MAO from ARV and rehab cost. The fastest way to screen deals.<\/li>\n<li><a href=\"\/arv-calculator\"><strong>ARV Calculator<\/strong><\/a> \u2014 Build a comp-based after repair value from real neighborhood sales data.<\/li>\n<li><a href=\"\/fix-and-flip-calculator\"><strong>Fix and Flip Calculator<\/strong><\/a> \u2014 Full deal model with itemized rehab, holding costs, financing, commissions, and net profit.<\/li>\n<li><a href=\"\/brrrr-calculator\"><strong>BRRRR Calculator<\/strong><\/a> \u2014 Model buy-rehab-rent-refinance-repeat deals with cash flow and equity analysis.<\/li>\n<li><a href=\"\/blog\/after-repair-value-calculator-guide\/\"><strong>After Repair Value Calculator Guide<\/strong><\/a> \u2014 How to pull and weight comps accurately for any market.<\/li>\n<li><a href=\"\/blog\/rehab-cost-estimator-guide\/\"><strong>Rehab Cost Estimator Guide<\/strong><\/a> \u2014 Room-by-room cost checklist to build accurate renovation budgets.<\/li>\n<li><a href=\"\/blog\/cost-to-rehab-a-house\/\"><strong>Cost to Rehab a House<\/strong><\/a> \u2014 National and regional benchmarks for common renovation scopes.<\/li>\n<li><a href=\"\/blog\/maximum-allowable-offer-calculator\/\"><strong>Maximum Allowable Offer Calculator Guide<\/strong><\/a> \u2014 Advanced MAO strategies beyond the basic 70% formula.<\/li>\n<li><a href=\"\/blog\/house-flipping-profit-calculator-guide\/\"><strong>House Flipping Profit Calculator Guide<\/strong><\/a> \u2014 How to model net profit after every real cost of flipping.<\/li>\n<li><a href=\"\/blog\/70-percent-rule-real-estate-flipping-guide\/\"><strong>70% Rule Real Estate Flipping Guide<\/strong><\/a> \u2014 Deep dive into the rule, its history, and market-specific applications.<\/li>\n<li><a href=\"\/blog\/fix-and-flip-guide\/\"><strong>Fix and Flip Complete Guide<\/strong><\/a> \u2014 End-to-end guide to the house flipping business from deal finding to disposition.<\/li>\n<\/ul>\n<h2 id=\"conclusion\"><span class=\"ez-toc-section\" id=\"Bottom_Line_When_the_70_Rule_Calculator_Works_and_When_It_Doesnt\"><\/span>Bottom Line: When the 70 Rule Calculator Works (and When It Doesn&#8217;t)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 70 percent rule calculator is a tool for discipline. It is not a guarantee of profit \u2014 it is a ceiling that keeps you from the most common and most preventable mistake in real estate flipping: paying too much. Every experienced flipper has a story about a deal where they stretched past their MAO &#8220;just a little&#8221; and paid for it over six months of holding costs, a price reduction, or a rehab overrun that had no margin to absorb.<\/p>\n<p>The formula is simple: <strong>MAO = ARV \u00d7 70% \u2212 Rehab Cost<\/strong>. The execution requires accurate ARV analysis, honest rehab estimates, realistic holding cost projections, and the discipline to walk away from deals that do not meet your number. Adjust the multiplier \u2014 65% for high-risk situations, 75% for experienced investors with minimal rehab \u2014 but never skip the calculation entirely.<\/p>\n<p>Run your next deal through the <a href=\"\/70-percent-rule-calculator\">70 percent rule calculator<\/a> before you make your next offer. It takes 30 seconds and it might save you from a six-figure mistake.<\/p>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>You found a distressed property listed at $162,000. The neighborhood comps suggest it could sell for $285,000 after a full renovation. Your contractor quotes $55,000 for the rehab. The question&#8230;<\/p>\n","protected":false},"author":0,"featured_media":629,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guides"],"_links":{"self":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/comments?post=626"}],"version-history":[{"count":5,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/626\/revisions"}],"predecessor-version":[{"id":633,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/626\/revisions\/633"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/media\/629"}],"wp:attachment":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/media?parent=626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/categories?post=626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/tags?post=626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}