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70% Rule Calculator to calculate the maximum allowable offer that real estate investors should pay for a house. For investors who are looking to fix and flip houses for profit, the 70% rule calculator helps them determine the maximum price to purchase a house based on the after repair value and renovation costs.
Fix and Flip Calculator
|After repair value (ARV)|
|Maximum Allowable Offer (MAO)|
|Wholesaler Maximum Allowable Offer (MAO)|
The 70% rule in real estate is a formula that fix and flip investors often use to determine the profitability of a deal. The 70% rule states that a buyer should never pay for a property if the price is more than 70% of the after repair value after deducting the repair costs. In other words, the 70% rule prevents investors from overpaying for properties. Some investors use 75% as their rule for investing in fix and flip properties.
There is no way to accurately calculate the ARV of a property. However, there are ways that you can use to estimate the value of a property after renovation. One way is to compare the property to similar houses in the same neighborhood that were sold recently. You can also check the listing prices of similar houses in the same area, but pay more attention to the sold price. The reason is that people may overestimate their houses and the asking price might be higher. Sold price, on the other hand, is the price that buyers are willing to pay. Other factors that might impact the ARV of a property are the location, age, size, style, and condition of the property. How much are you planning to spend on renovating the house? Is the house near public transportation? Does the neighborhood have a park? Is the school district any good? Is the crime rate for the area low? Before making a decision, be sure to do thorough research and analysis.
The wholesaling calculator gives investors the option to calculate the wholesaler's profit and know the wholesaler's maximum allowable offer for a property.
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