Calculator · Flip and wholesale

70% rule / max allowable offer calculator

Find the most you can offer on a flip or wholesale deal, how your contract price compares, and whether the deal still works for your end buyer.

Results

Updates as you type. The formulas are under "How this is calculated" below.

Max allowable offer
Spread (MAO - contract)
Contract vs MAO
Asking price - MAO

End buyer's flip

Buyer price (contract + fee)
Rehab with contingency
Buying closing costs
Holding costs
Selling costs
Total cost
Buyer profit
Buyer ROI
Buyer check

How to use this calculator

Enter the after-repair value (ARV) from your comps and the repair estimate.
Set the rule percentage. The classic rule is 70%, but you can use another number.
Enter your assignment fee or profit, plus your own holding and closing costs.
Enter the seller asking price and your contract price to see the spread.
Check the end buyer section. Adjust the buyer costs and minimums to match your buyers.

Worked example

Say the ARV is $300,000, repairs are $40,000 and the rule is 70% (the values loaded above). You want a $12,000 fee and expect $3,500 of holding and $2,500 of closing costs.

MAO = 70% x $300,000 - $40,000 - $12,000 - $3,500 - $2,500 = $152,000.

Your contract price is $145,000, so the spread is $7,000 under the MAO. The seller asks $165,000, which is $13,000 above the MAO.

Your end buyer pays the contract plus your fee, $157,000, and spends $44,000 on rehab with contingency.

Their total cost is $235,140, so their profit is $64,860, an ROI of 27.6%.

How this is calculated

MAO = rule % x ARV - repairs - assignment fee - holding costs - closing costs With a 0 fee and no costs this is the classic 70% rule: 70% x ARV - repairs.
Spread = MAO - contract price Positive means your contract is under the MAO.
End buyer's price = contract + your fee. Their rehab = repairs x (1 + contingency %). Buying closing = buyer price x closing %. Holding = months x monthly cost. Selling = ARV x selling %.
Buyer profit = ARV - total cost Buyer ROI = profit / total cost Pass when both meet the buyer's minimums.

The 70% rule is a screen, not an appraisal. ARV from comps is the number most likely to be wrong.

Frequently asked questions

What is the 70% rule?

It is a quick screen for flips. You multiply the after-repair value by 70% and subtract the repair costs. The result is a common ceiling on what to pay, leaving room for profit and costs.

What does MAO mean?

MAO means maximum allowable offer. It is the highest price you can offer and still hit your target profit. This calculator also subtracts your fee, holding costs and closing costs.

Is the 70% rule always right?

No. It is a rule of thumb. In expensive markets it can rule out most deals, and in cheaper markets it may leave too thin a margin. Your costs, timeline and financing matter more than any single percentage.

How do I find a reliable ARV?

ARV usually comes from recent sales of similar, renovated homes nearby. An agent or appraiser can help. It is the input most likely to be off, so test a lower value too.