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70% Rule Calculator

Calculate your maximum offer price using the 70% rule. Free MAO calculator for house flippers and wholesalers. Never overpay for a flip again.

Property Details

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What the property will be worth after repairs

$

Total renovation budget

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Standard is 70%, adjust based on holding costs

The 70% Rule Formula

MAO = (ARV × 70%) - Rehab Cost

The 70% rule is a quick way for fix-and-flip investors to determine the maximum price to pay for a property. The remaining 30% covers holding costs, closing costs, and profit margin.

When to Adjust the Rule

75%Low holding costs, quick flip, experienced team
70%Standard rule for most markets and situations
65%High holding costs, risky market, first flip
Maximum Allowable Offer (MAO)
$230,000
Using 70% rule

Profit Projection at MAO

Purchase (MAO)$230,000
Rehab Cost$50,000
Total Investment$280,000
Sale Price (ARV)$400,000
Gross Margin$120,000 (30%)

Note: This gross margin must cover closing costs, holding costs, and your profit.

MAO by Rule Percentage

65% Rule (Conservative)$210,000
70% Rule (Standard)$230,000
75% Rule (Aggressive)$250,000

Important Considerations

  • • Get accurate ARV from 3+ comparable sales
  • • Include contingency in rehab estimates (10-20%)
  • • Factor in your market's typical closing costs
  • • Consider financing costs and holding time

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Frequently Asked Questions

What is the 70% rule?

The 70% rule is a quick formula flippers use: Max Offer = ARV × 70% - Rehab Costs. It ensures you leave room for profit after all costs are accounted for.

When should I adjust from 70%?

In competitive markets, some investors use 75-80%. In risky markets or high-rehab deals, use 65-70%. The percentage should account for your profit margin plus typical buying/selling/holding costs.

What costs does the 30% cover?

The 30% cushion covers: buying costs (2-5%), selling costs (8-10%), holding costs (variable), and your profit (10-15%). If your costs differ, adjust the percentage accordingly.

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