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Updated over 7 years ago,
70% Rule: Does it Apply in Costly Markets
Hello BP community, I live and Sell Homes in San Diego CA. I stumbled upon this property, SOLD for $609,000 needed flooring, paint, kitchen and bathrooms (flipper refinished cabinets) then sold it for $709,000 two months later. Based on the 70% Rule, the investor should only have paid $496,300. After Selling expenses, estimated at 4.5% and Construction/Materials no more then $30K, for a rough estimate of $61,905 (doesn't include taxes). My question is, does that "70% rule" apply in High Acquisition markets? Is 85% ARV too much of a risk? Does that even leave enough spread to make a profit?