← Guides · November 9, 2026
The 70% Rule for House Flipping, With a Real Example
Rule: max offer = ARV × 70% − rehab.
With a $350,000 ARV and $45,000 rehab, the max offer is $200,000. Suppose you pay $215,000 instead, financed at 80% with 11% interest and 2 points for 6 months.
- All-in cost: about $316,350
- Net profit: about $33,650
- Cash invested: about $116,350
- ROI: about 29% (roughly 58% annualized)
Why the rule exists
The deal still works at $215,000, but a 20% rehab overrun ($9,000) drops profit to about $24,650, and a slow sale takes more.
Use the calculator to stress-test before offering.