70% rule calculator
Enter the after-repair value and your rehab budget to get the maximum you should offer on a flip or BRRRR. Adjust the percentage for your market.
A higher percentage means a higher offer and a thinner safety margin. Drop it when the market is slow or your comps are shaky.
How the 70% rule works
The 70% rule keeps a flip or BRRRR from starting underwater. You pay at most 70% of what the finished property will be worth, then take out the rehab — and the 30% you held back absorbs the costs a deal racks up before you sell or refinance.
On a $220,000 ARV with $45,000 of rehab: 70% of ARV is $154,000, less $45,000 of rehab leaves a maximum offer of $109,000. The $66,000 gap between that all-in figure and the ARV is your buffer for holding, closing, and selling costs, plus profit.
The rule is only as good as the two numbers you feed it. Learn how to nail them in after-repair value explained, the 70% rule, and how to underwrite a BRRRR.
What is the 70% rule in real estate?
The 70% rule is a screening heuristic for fix-and-flip and BRRRR deals: pay no more than 70% of a property's after-repair value (ARV) minus the estimated rehab cost. The held-back 30% is a buffer for holding costs, closing costs, selling costs, and profit.
Why 70% and not another number?
The 30% gap is meant to absorb the transaction and carrying costs a flip incurs (often 12–18% of ARV) and still leave profit. Investors tighten to 65% in soft or slow markets where those costs run higher, and some stretch to 75% in fast markets with low carrying costs and reliable comps.
Does the 70% rule work for a BRRRR?
Yes, and the threshold lines up with the refinance math. Investment-property cash-out refinances are typically capped at 70–75% LTV, so buying above 70% of ARV makes it hard to pull most of your capital back out in the refinance. The rule protects both flip margin and BRRRR capital recovery.
What are the 70% rule's limitations?
It is a fast filter, not a verdict. It ignores your actual holding time, financing costs, and market-specific transaction costs, and it depends entirely on an accurate ARV and rehab estimate. Use it to decide what to analyze further, then build a full deal model before you make an offer.
One number on the back of a napkin isn't a deal. CapScout pulls the ARV comps and models the full flip or BRRRR on any listing.
Start free