Boston, MA · Member since 2026 · 15 posts · 8 votes
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.
Investor · Washington, US · Member since 2021 · 70 posts · 14 votes
19h
True on the LTV side, but the 70% rule isn't a lending cap - it's a quick offer filter that bakes in your rehab budget, closing/holding costs, and profit margin (ARV x 0.70 minus repairs). Where it actually bites is on the exit appraisal, not the entry loan. Even if a lender gives you 90% CLTV, you've just financed a thinner spread, so the deal still has to pencil at your real all-in cost.