{
  "slug": "seventy-percent-rule-offer",
  "title": "70% Rule Maximum Offer Calculator",
  "heading": "Maximum Allowable Offer Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/seventy-percent-rule-offer",
  "summary": "The highest price a flip supports, from ARV, rehab and your required margin.",
  "description": "The 70% rule is shorthand for maximum allowable offer: 70% of after-repair value minus rehab. It is a screening tool rather than an underwriting model, because the right percentage varies with market, price point, and cost of capital — a low-priced property in a slow market needs a wider spread than a fast-turning one in a hot metro. This calculator computes the offer at your chosen percentage, then computes a second, cost-built offer from your actual selling, financing, and holding costs plus a target profit, so you can see how far the rule of thumb is from the truth on this specific deal.",
  "formula": "Rule-of-thumb MAO = (ARV × rule %) − rehab. Cost-built MAO = ARV − rehab − selling costs − holding − financing − target profit.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=seventy-percent-rule-offer",
  "inputs": [
    {
      "id": "arv",
      "label": "After-repair value",
      "kind": "number",
      "hint": null,
      "default": 340000,
      "unit": "$",
      "min": 1000,
      "max": null
    },
    {
      "id": "rehab",
      "label": "Rehab estimate",
      "kind": "number",
      "hint": null,
      "default": 55000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rulePct",
      "label": "Rule percentage",
      "kind": "number",
      "hint": null,
      "default": 70,
      "unit": "%",
      "min": 50,
      "max": 90
    },
    {
      "id": "targetProfit",
      "label": "Target profit",
      "kind": "number",
      "hint": null,
      "default": 40000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "sellPct",
      "label": "Selling costs",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": "% of ARV",
      "min": 0,
      "max": 20
    },
    {
      "id": "holding",
      "label": "Total holding costs",
      "kind": "number",
      "hint": null,
      "default": 4200,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "financing",
      "label": "Total financing costs",
      "kind": "number",
      "hint": null,
      "default": 12000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "buyClosing",
      "label": "Purchase closing costs",
      "kind": "number",
      "hint": null,
      "default": 4200,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "costMao",
      "label": "Maximum offer built from real costs",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "ruleMao",
      "label": "Offer from the rule of thumb",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "gap",
      "label": "How much the rule overshoots",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "impliedRule",
      "label": "Rule percentage your costs imply",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "selling",
      "label": "Selling costs at exit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalCosts",
      "label": "Non-rehab costs total",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "After-repair value: 340000 $",
      "Rehab estimate: 55000 $",
      "Rule percentage: 70 %",
      "Target profit: 40000 $",
      "Selling costs: 8 % of ARV",
      "Total holding costs: 4200 $",
      "Total financing costs: 12000 $",
      "Purchase closing costs: 4200 $"
    ],
    "outputs": [
      "Maximum offer built from real costs: $197,400.00",
      "Offer from the rule of thumb: $183,000.00",
      "How much the rule overshoots: -$14,400.00",
      "Rule percentage your costs imply: 74.2%",
      "Selling costs at exit: $27,200.00",
      "Non-rehab costs total: $47,600.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter after-repair value ($).",
      "Enter rehab estimate ($).",
      "Enter rule percentage (%).",
      "Enter target profit ($).",
      "Enter selling costs (% of ARV).",
      "Enter total holding costs ($).",
      "Enter total financing costs ($).",
      "Enter purchase closing costs ($).",
      "Read your maximum offer built from real costs on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "arv": 205000,
        "rehab": 33000,
        "rulePct": 50,
        "targetProfit": 24000,
        "sellPct": 4.8,
        "holding": 2500,
        "financing": 7000,
        "buyClosing": 2500
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "arv": 340000,
        "rehab": 55000,
        "rulePct": 70,
        "targetProfit": 40000,
        "sellPct": 8,
        "holding": 4250,
        "financing": 12000,
        "buyClosing": 4250
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "arv": 545000,
        "rehab": 88000,
        "rulePct": 90,
        "targetProfit": 64000,
        "sellPct": 12.8,
        "holding": 6750,
        "financing": 19000,
        "buyClosing": 6750
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Is the 70% rule still valid?",
      "a": "As a five-second screen, yes — it filters out obviously unworkable deals before you spend time on them. As an underwriting standard it is crude, because it bundles selling costs, financing, holding, and profit into one constant that does not move with rates or price point."
    },
    {
      "q": "Why does my cost-built offer differ from the rule?",
      "a": "Because your actual costs differ from the ones baked into 70%. Expensive hard money, a long timeline, or high transfer taxes all push the true maximum offer below the rule; cash purchases and quick turns can push it above."
    },
    {
      "q": "Should the rule percentage change with price point?",
      "a": "Yes. On low-priced properties, fixed costs consume a larger share of ARV, so investors often work at 65% or lower. On high-priced properties, the same dollar profit is a smaller percentage, and many operators go to 75-80%."
    },
    {
      "q": "What if the seller won't accept my maximum offer?",
      "a": "Then the deal does not work at your cost structure, and the answer is to walk. The discipline of the maximum allowable offer is entirely in refusing to exceed it — every flip that loses money was purchased above one."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/house-flip-profit",
    "https://www.revenuelab.fyi/toolbox/brrrr",
    "https://www.revenuelab.fyi/toolbox/rental-cap-rate"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — 70% Rule Maximum Offer Calculator (https://www.revenuelab.fyi/toolbox/seventy-percent-rule-offer)"
}