70% rule for flipping?
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?
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.
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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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
I am at 70% with 15% of ARV shaved off.