what is the 70% formula? how can i find out the accurate numbers?

[Account Closed]

what is the breakdown for the 70% formula?

how much of a % can i expect purchase closing costs and selling costs?

holding costs?

hml with holding costs?

how come nobody explains the breakdown of the actual 70% rule??

the 70% rule doesnt work the same on a 600k property as it does with a 200k property so how do i find out the accurate costs involved

[Nghi Le]

I'm from Seattle, and the 75% rule constitutes a good deal here.  Although nowadays I'm seeing a lot of people taking on 80% deals.  The average home in Seattle is $700k.

I set aside 10% for closing costs and selling costs.  6% for realtor commission, 1.78% for excise tax, and ~2% to account for closing costs on both ends (buying and selling).

Financing and holding costs will be 5-10%. I'm borrowing hard money at 8-10% and 2 pts for a 1-yr loan. The total financing cost depends on how long you take to sell. Keep in mind the points and interest rate are based on loan amount, not ARV (like the rest of the percentages). The loan amount's usually going to be 65-75% of the ARV.

With the 75% rule, I stand to make 5-10% of the ARV as profit.