70% rule

6 Replies

Can someone explain how to figure the % of ROI? For example I do the equations above with these numbers.

ARV = $99K repairs $25K

$99K * 0.70 = 69300 - 25000 = 44300

Say I do sell for the total asking price $99k

$99K - 44300 = $54700 

What is the equation to figure my % for ROI?

I know the percentage on the money borrowed has to figure in somewhere right?

Based on the numbers above is it correct to say ROI is 123%

I won't post it again, but just a quick note; remember the 70% rule is a rule of thumb. It's not useless like the 2% rule. But don't take it as Gospel. On more expensive properties, you can settle for less, on really cheap properties, you'll need more. Sq. ft. for sq. ft. a roof costs the same, and you'll have less margin for mistakes and overages on cheap properties.