After Repair Value 70 Percent Calculator
The 70 percent rule is a fast screen used by house flippers to set a maximum purchase price. It says you should pay no more than 70 percent of a property's after repair value (ARV) minus your estimated repair costs, leaving a margin for holding, selling, and profit. Enter your ARV estimate, the rule percentage (editable, defaulting to 70), and your repair budget. The calculator returns the maximum allowable offer and shows the gross spread the rule reserves for costs and profit.
70 percent rule formula
ARV times rule = ARV * (rule % / 100)
Maximum allowable offer = ARV times rule - repair costs
Reserved margin = ARV - (ARV times rule)
ARV is your estimated post-renovation value. The rule percentage is editable; 70 is the conventional default. Repair costs are your renovation budget. The reserved margin is the share of ARV the rule withholds for transaction costs and profit.
House-flipping context
- The 70 percent rule is a rule of thumb, not a regulation; adjust the percentage to your market.
- ARV should be based on recent sales of comparable, renovated homes nearby.
- The 30 percent gap is intended to cover financing, holding, closing, and selling costs plus profit.
- If the maximum allowable offer is negative, the deal does not work under your inputs.
- Model holding and closing costs separately for a precise return analysis.
After repair value rule: frequently asked questions
What is the 70 percent rule?
The 70 percent rule is a guideline used by real estate investors and house flippers. It says the maximum you should pay for a property equals 70 percent of its after repair value (ARV) minus the estimated repair costs. The 30 percent margin is meant to cover holding costs, selling costs, and profit.
What is the maximum allowable offer formula?
Maximum allowable offer (MAO) = ARV times the rule percentage minus repair costs. With the standard rule, MAO = ARV times 0.70 minus repairs. Lower the percentage for a larger safety margin or raise it in competitive markets, using the editable field.
What is after repair value?
After repair value (ARV) is the estimated market value of a property once all planned renovations are complete. It is typically based on recent sales of comparable, fully renovated homes in the same area. Your own ARV estimate is a required input here.
Why use 70 percent and not another number?
The 70 percent figure is a rule of thumb that bundles a profit margin and a cushion for transaction and holding costs into one number. It is not a legal or fixed value, so this calculator lets you change the percentage to suit your market, deal, and risk tolerance.
Does the rule include closing and holding costs?
Indirectly. The 30 percent gap between ARV and the offer (before repairs) is intended to absorb financing, holding, closing, and selling costs plus profit. For precise analysis, model those costs separately rather than relying on the rule alone.
Official sources
- Consumer Financial Protection Bureau: Owning a Home.
- U.S. Department of Housing and Urban Development: Buying a Home.
Reviewed by the CalculatorHub team, edited by James Graham, 16 June 2026. See our methodology.