REDOSFree 70% Rule Calculator
The most you can pay and still have a deal. ARV × 70%, minus your rehab budget. Free. No login.
The rule is a screening tool, not a valuation. It answers “is this worth underwriting properly?” — run the full flip numbers before you offer.
The asking price is $50,000 over — negotiate down or walk.
Pass — this loses money as structured.
Net profit is -16.7% of ARV — weak margin.
The arithmetic
You don't just need the numbers. You need to know what to fix.
Free calculators hand you a spreadsheet. REDOS reads your deal and tells you exactly where it's weak — and how to save it.
Projected net is $0. To hit your target you'd need to buy at $165,000 — that's $50,000 below your current price. Renegotiate or walk.
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Where the 70% rule comes from
The rule exists because a flip has to absorb costs nobody thinks about at the offer stage: agent commissions on the sale, closing costs on both ends, holding costs while the work drags, financing points, and the rehab overrun that arrives on almost every project. The 30% you leave on the table is not profit — most of it is those costs. What survives is your margin.
- 1
Start with ARV
What the property sells for once the work is finished. Get this from comps, not from hope.
- 2
Take 70% of it
This is the ceiling for everything you will spend — purchase plus rehab combined.
- 3
Subtract the rehab budget
What is left is the most you can pay for the house itself.
- 4
Compare to the asking price
Above your maximum offer, you negotiate or you walk. The rule only works if you are willing to walk.
Treat it as a screen, not a valuation. In a hot market experienced flippers stretch to 75%, and on a light cosmetic rehab with a fast turn the maths can support more. But the further above 70% you go, the more the deal depends on nothing going wrong — and something usually does. Run the full flip numbers before you make the offer.
Frequently asked questions
What is the 70% rule in house flipping?
Do not pay more than 70% of the after-repair value, minus the cost of repairs. On a $300,000 ARV with $45,000 of rehab: $300,000 × 0.70 = $210,000, minus $45,000, gives a maximum offer of $165,000.
How do you calculate maximum allowable offer?
MAO = (ARV × 0.70) − rehab costs. Some investors also subtract their expected wholesale or assignment fee if one is involved. The calculator above shows every step of the arithmetic.
Why 70% and not 80%?
The 30% gap covers selling commissions, closing costs on both the purchase and the sale, holding costs, financing points, and the rehab overruns that hit most projects — with what remains being your profit. At 80% there is very little left for anything to go wrong.
Can I use 75% instead?
Experienced flippers do, in competitive markets or on light cosmetic work with a quick turnaround. It shrinks your margin for error, so it is a decision to make deliberately with your own numbers rather than a default. Change the rule percentage above to see the effect.
Is the 70% rule enough on its own?
No. It is a screening filter that tells you whether a listing is worth underwriting properly. It says nothing about your actual holding costs, financing, or timeline. Run the full flip analysis before you offer.