Guide
The 70% rule explained
Team RE Underwrite Lab
What people mean by the 70% rule
The 70% rule is a fix-and-flip rule of thumb that wholesalers also use to price offers. A common statement of it is: the most an end buyer might pay is 70% of after-repair value, minus the repairs. It is a habit of speech, not a law, and not a promise that a buyer exists at that price.
Seventy percent is the figure people name. A different percent is still the same shape of formula. The wholesale calculator lets you type the percent.
Formula
Plain version: max offer = ARV × 0.70 − repairs. If you use a different rule, replace 0.70 with that percent divided by 100.
The wholesale calculator on this site goes one step further. Max allowable offer = ARV × rule percent − rehab − the end buyer's closing costs. The contract price is that offer minus the assignment fee. Those extra lines are in the calculator so the fee and the buyer's costs are not forgotten. They are not part of the one-line version people quote.
Example
Example. ARV is $200,000 and repairs are $40,000. Seventy percent of $200,000 is $140,000. Minus $40,000 of repairs, the plain rule says $100,000. These are example inputs, not a contract this company negotiated.
If the end buyer's closing costs are $5,000, the calculator's max allowable offer is $95,000, because it subtracts those costs too. An assignment fee comes off that offer to get a contract price. None of those figures is a buyer you can call.
Questions
Is 70% required?
No. It is a common teaching number. The calculator accepts another percent.
Does the rule include holding costs and agent fees?
The one-line version does not. The fix and flip calculator is where hold, financing, and selling costs are counted for a flip.
Why does the wholesale page mention a license?
Assigning a contract or marketing a house you do not own may require a license in your state. That is a legal question for an attorney, not a result the calculator can give.
Where does ARV come from?
You type it, or you multiply square feet by a price per square foot on the ARV calculator. This article does not look up sales.
Does a number under the rule mean the deal is safe?
No. It means the arithmetic cleared a screen you chose. The buyer, the repairs, and the resale can all be wrong.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Assigning contracts or marketing properties you do not own may require a real estate license in your state; consult a real estate attorney.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.