The 70% Rule

[Julian Buick]

The 70% rule of thumb seems like a great way of determining how much to purchase a house for. 

How many people that use the 70% rule actually achieve the 70% rule once the rehab has been done and the house has sold? In other words, how many people actually sell the house for 100/70 times the (purchase price + expenses).

Should the expenses include realtors fees and holding costs?

[Scott W.]

this doesn't taken into account your cash-on-cash return if leveraging. also, I find this rule to not be very accurate for most people. I'm perfectly content with making $10k. how many employees get bonuses like that?

I have one that is 86% of the ARV when you include my carrying costs, etc. I still stand to make $20k and a 162% cash-on-cash return.

who can argue with that one? :)