Flipping Houses and the 70% Rule

[Jared Smith]

Flipping homes has become so popular over the years because of the shows on TV. I am often asked how do you know which property is a good property to flip. The 70% rule is a very quick way to help determine this. You would take 70% of the after repair value (ARV) minus the repair costs. This tells you what the purchase price should be. For example...The house will sell for $200,000 after it is fixed up. $200,000 x 70% = $140,000. $140,000 - $30,000 (repair costs) = $110,000. The 70% rule tells you the purchase price should be near $110,000.

Happy Real Estate Investing!

-Jared