## What Is the 70% Rule in Fix and Flip Investing?

Flipping houses can be a great career. But one must know how to accurately calculate the numbers associated with their properties in order to see a significant profit. This is where the 70% rule comes in. Let’s discuss what the 70% rule is in fix and flip investing and how you can benefit from it on your next project.

## Doing the Calculations

The 70% rule is essentially this calculation:

• ARV (after repair value) x 70
• Subtract the cost of repairs from the number you got
• Total is the suggested offer price

Let’s use a specific example like a \$200,000 property ARV. If the property requires around \$70,000 in repairs, the maximum amount you should pay is \$70,000. So, how does this rule benefit investors?

## Benefits of the 70% Rule

The 70% rule is a solid calculation to use when determining general numbers, and it can help you determine whether to flip a specific property or not.

The 70% rule is great for helping you save money on a property and not spending more than you should. When investors flip properties, they should not spend more than the property’s ARV; If they do, they’re just losing money. However, this rule may not always apply in every situation.