70% Rule Calculator

The fastest sanity check in real estate investing. Enter the After Repair Value and estimated repairs to instantly calculate your Maximum Allowable Offer (MAO) using the 70 rule flippers and wholesalers rely on.

Your Maximum Allowable Offer
$170,000
($300,000 × 70%) − $40,000
Run a full deal analysis →Read the flip profit guide

How the 70% rule works

The 70 rule is a shortcut real estate investors use to make sure a fix-and-flip has enough margin to cover holding costs, financing, closing, realtor fees, and profit — without spreadsheeting every line item.

MAO = (ARV × 0.70) − Repair Costs

The 30% buffer between the offer and ARV is meant to absorb roughly 8–10% in resale/agent costs, 3–5% in holding and lender fees, and leave 15–20% net profit for the investor.

Worked example

  • ARV: $300,000
  • Repairs: $40,000
  • 70% of ARV: $210,000
  • MAO: $210,000 − $40,000 = $170,000

If the seller wants $180,000, you either negotiate down $10,000+ or pass — paying above MAO eats into your target profit.

When to adjust the 70% rule

  • Hot markets / low ARV homes ($150k–$250k): 65% is safer — fixed costs eat a bigger % of ARV.
  • High ARV homes ($500k+): 75% often works — fixed costs are a smaller share.
  • Wholesalers: Aim for a $10k+ assignment spread below the end buyer's MAO.
  • BRRRR investors: The 70% rule doubles as a refi-friendly MAO for holding long-term.

Frequently asked questions

What does the 70% rule mean in real estate?
It's the max price an investor should pay for a flip: 70% of the home's After Repair Value, minus repairs. It bakes in profit, holding, and selling costs.
Is the 70% rule accurate?
It's a fast filter, not a full underwrite. Use it to screen deals in seconds, then confirm with a full P&L in the FlippingIQ analyzer.
How is MAO different from ARV?
ARV is the resale value after rehab. MAO is the most you can pay today and still hit your profit target.
What repair cost should I use?
Use a conservative all-in number that includes materials, labor, permits, and a 10–15% contingency. Underestimating repairs is the #1 reason flips lose money.

Ready for the full underwrite?

FlippingIQ runs comps, repair estimates, financing, and net profit — all on your phone.

Analyze a real deal →