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What is the 70 percent rule when you gong to fix or flipping houses?

The 70 percent rule states that an investor should pay 70 percent of the ARV of a property minus the repairs needed. The ARV is the after repaired value and is what a home is worth after it is fully repaired.

If a home’s ARV is $150,000 and it needs $25,000 in repairs, then the 70 percent rule states an investor should pay $80,000 for the home.  $150,000 x 70% = 105,000 – $25,000 = $80,000. Buying a house for $80,000 that will be worth $150,000 may seem like an awesome deal, but you have to remember all the costs involved in a fix and flip. Here is a great article that describes the costs involved when fix and flipping.