Rehabbing & House Flipping

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William Luke Laity
  • New to Real Estate
  • Saint John, IN
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70% rule for flipping?

William Luke Laity
  • New to Real Estate
  • Saint John, IN
Posted Dec 16 2022, 17:26

I know it can vary depending on which market you are in, but is 70% off the ARV still a good rule to have for estimating closing costs and commissions, or has it changed some?

If you have something different, what do you find works for you? 

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Bob Okenwa
  • Real Estate Agent/Investor
  • Peoria, AZ
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Bob Okenwa
  • Real Estate Agent/Investor
  • Peoria, AZ
Replied Dec 17 2022, 04:18

@William Luke Laity

If you can hold to 70% of ARV-rehab you'd be in pretty good shape on most deals. It isn't as easy to find such deals these days, you really have to go out and create them.

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Ezra Henderson
  • Wadsworth, OH
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Ezra Henderson
  • Wadsworth, OH
Replied Dec 17 2022, 04:25

The 70% rule includes your profit in there. It’s usually broken down as 15% profit, 6% holding/financing costs, and 9% closing costs/commissions. 
So you find the ARV, multiply it by 70%, and then subtract your repairs costs and that's the price you should buy at. I don't generally use the 70% rule, but I know people who do well with it.

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Eliott Elias#3 All Forums Contributor
  • Investor
  • Austin, TX
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Eliott Elias#3 All Forums Contributor
  • Investor
  • Austin, TX
Replied Dec 17 2022, 09:54

I am at 70% with 15% of ARV shaved off.