The 70% Rule (ARV)
Flippers don't guess their max offer — they back into it from the resale value.
The 70% rule caps what you pay on a fix & flip. Start with the after-repair value (ARV) — what the finished property should sell for, based on recent comparable sales. Multiply the ARV by 70%, then subtract your estimated repair costs. That's your rough maximum purchase price. The 30% buffer is there to absorb holding costs, closing and selling fees, and your profit margin.
Example: ARV of $300,000. Seventy percent is $210,000. Subtract $50,000 in repairs, and your max offer lands around $160,000.
Takeaway: Treat the 70% rule as a starting ceiling, not a target — and verify ARV against recently sold comps, never active listings, before you make an offer.