JB PARCEL70% Rule Calculator
The 70% rule gets you an offer in ten seconds. The profit-based MAO underneath it accounts for financing, carry, and selling costs, which is the number you should actually write.
How this calculator works
The 70% rule says your maximum offer is seventy percent of after-repair value, minus repairs. On a $315,000 ARV with $52,000 of work, that is $168,500. The thirty percent haircut is meant to cover financing, holding, selling costs, and profit all at once, which is what makes it fast and what makes it approximate.
The profit-based MAO does the same job honestly. It starts from your ARV, subtracts every real cost, points, interest, purchase closing, monthly carry, selling costs, and the profit you require, then solves backwards for the highest price that still works. When your timeline is long or your money is expensive, that number comes in below the rule price, and it is the one to write.
Contingency belongs on the repair line, not in your head. Twelve percent is a reasonable default on a house you have walked; twenty percent is more honest on anything with an unknown roof, unknown foundation, or unknown plumbing. Rehabs almost never come in under budget.
The output that matters most for planning is cash needed. Even with a lender covering 85 percent of purchase and most of the rehab, you are bringing the gap, the points, the closing costs, and every month of carry out of pocket. Flippers run out of cash more often than they run out of deals.
Worked example: a Memphis flip
ARV $315,000, $52,000 of repairs, six-month timeline, hard money at 11.5 percent and 2 points.
| MAO by the 70% rule | $162,260 |
|---|---|
| MAO for a $40,000 profit | $167,476 |
| Offer this or less | $162,260 |
| Profit if you buy at the rule price | $45,638 |
| All-in cost | $269,362 |
| Cash you bring | $56,737 |
At a six-month timeline the rule is the tighter of the two, so it sets the offer and you clear $45,638 instead of your $40,000 target. Now stretch the schedule to ten months. The rule price does not move at all, because it does not know what a calendar is, while the profit-based MAO falls to $159,238. Four extra months quietly cost you $8,238 of buying power, and if you had trusted the rule alone you would never have seen it.
Questions investors ask
Is the 70% rule still accurate?
As a screen, yes. As a decision, it depends on whether your costs match the ones baked into the thirty percent. It was calibrated for a roughly six-month flip with typical hard money and roughly eight percent selling costs. Longer holds, more expensive money, or higher commissions all break it, which is exactly what the profit-based MAO on this page is for.
Should I use 70, 75, or 65 percent?
Seventy is standard. Drop to 65 on your first several deals, in a market where days on market are climbing, or on a heavy rehab where the estimate could move. Push to 75 only on a light cosmetic rehab, in a market absorbing inventory fast, with a contractor you have used before. The percentage is a risk dial, not a fact.
How do I get a reliable ARV?
Sold comps only, within about half a mile, same bed and bath count, similar square footage, closed in the last six months, and adjusted for condition. Pull recent sale prices for surrounding parcels on the JB PARCEL map, then have an agent who works that neighborhood check your number. Active listings tell you what sellers hope for, not what buyers paid.
What if my repair estimate is wrong?
It will be, at least a little, so build the contingency in and get a contractor bid before your inspection period ends. Add twelve percent on a house you have walked with a contractor, twenty percent on anything with unknowns behind the walls. If your number moves more than that after you own it, the walkthrough was the problem, not the market.
Does the 70% rule work for BRRRR?
It is a reasonable starting screen, but BRRRR has a different exit. You are not paying commissions or seller closing costs, you are paying refinance costs, and your success test is how much cash comes back out rather than profit at sale. Use the BRRRR calculator, which models the refinance loan amount and the cash left in the deal.
Related calculators
Screening a real property? Pull its appraised value, assessed value, acreage, land use, and last recorded sale off the JB PARCEL parcel map and drop the real numbers into this calculator instead of guessing. Coverage runs across every county we carry.