The 70% ARV Rule - Do You Follow?

[Chadd Brandon]

How 'hard and fast' do you stick to/around the 70% ARV rule for fix and flipping a property?

[Spenser Harding]

For our first flip my wife and I decided the deal need to meet the 70% rule or we weren't purchasing. We found a wholesaler on Craigslist that was offering at exactly 70% - repairs. The challenge for us in the puget sound area is I had to find a property about an hour south of Tacoma in a small town of Centralia Wa. It was 175k x .7= 122.5k - 65k est repairs so offers at 57k. We ended up purchasing for 49k due to a septic replacement. We are 98% done and our total rehab is going to be 90k with holding costs and taxes etc so WAY over budget. Luckily the market has picked up so ARV hasn't moved to 190k since August when we closed. If we didn't stick by that we could have put ourselves in a bad spot.