The 70% Rule for House Flipping (And Why Pros Are Tightening It)

Added: 2026-05-05

The 70% rule is a fundamental formula for house flipping where Maximum Purchase Price = 70% × ARV (After Repair Value) minus Rehab Costs, with the remaining 30% margin covering carrying costs, commissions, and profit; however, due to current market conditions with average gross flip ROI at 25% (the lowest since 2008), many professional investors are tightening this rule to 60-65% to protect shrinking profit margins.