House Flipping: Basic Rules to Stay Profitable

What is House Flipping?

What is the 70% rule?

The 70% rule formula

After-repair value (ARV) * 0.70 − Estimated repair costs = Maximum buying price

The 70% rule in practice

$250,000 * 0.70 — $35,000 = $140,000 [ARV * 70% — Estimated repair costs]

Things to consider when using the 70% rule

The ARV may change while under renovation

The estimated cost of repairs can be tricky

What all is included in the estimated cost of repairs?

Finding properties that meet the 70% rule

Consider the value of surrounding properties

Focus on properties in need of cost-effective repairs

The Bottom Line



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