Fix-and-Flip Maximum Offer (70% Rule)
Maximum allowable offer = ARV x 70% - repairs (minus any wholesale fee).
Example
You enter
- After-repair value ARV ($, from comps) 300000
- Estimated repairs ($) 40000
- Rule percentage (%, default 70) 70
You get
- Maximum allowable offer ($) 170000
- Gross spread (costs + profit) 90000 $
Checked against published worked examples from: Lima One Capital.
Details, formula, and sources
ScopeThe 30% held back covers holding, financing, selling, and profit. ARV $300K, $40K repairs -> a $170K max offer, $90K gross spread. A rule of thumb, not an appraisal.
Formula or tableMAO = ARV x rule% - repairs - fee; spread = ARV - MAO - repairs.
Source and editionThe fix-and-flip 70% rule heuristic used by real-estate investors, by name.
Free accessThe 70% rule is a widely-published real-estate-investing rule of thumb. It is a heuristic, not an appraisal standard; the investor's actual costs and profit target govern.
What governsEstimate. AHJ and licensed professional govern.
API field namesarv, repairs, rule_pct, mao, spread
- Definition MAO = ARV x rule% - repairs - fee; default rule 70%real-estate-investing heuristic
- 30% haircut at 70%, the 30% held back covers holding, financing, selling, and profitfix-and-flip practice
- Unverified inputs ARV must be from real comps and repairs from a real scope; not an appraisalscope of this tile