When should an investor use a 65% or 75% rule instead?

In high interest rate environments or heavily distressed markets, conservative investors use a 65% rule for safety. In ultra-competitive, fast-appreciating markets, investors may stretch to a 75% rule.

Updated: August 2026 • Verified v1.2

Real Estate 70% Rule & House Flipping MAO Calculator

Finance & MathPopular

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MAO = (ARV * Rule_Percentage) - Estimated_Repairs; Net_Profit = ARV - (MAO + Repairs + Carrying_Costs)

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Understanding Your Results

Calculates the strict Maximum Allowable Offer (MAO), projected net flipping profit after holding/closing fees, and return on invested capital across 65%, 70%, and 75% rule models.

Practical Guidance & Next Steps

Bidding above the 70% MAO substantially increases the risk of taking a financial loss if renovation surprises or market downturns occur.

What is this?

A real estate acquisition utility that calculates maximum acquisition offers for house flipping and wholesaling.

How does it work?

1. Enter After Repair Value (ARV $) and estimated repair costs. 2. Choose rule threshold (65%, 70%, 75%) and enter carrying fees. 3. Instantly view your ceiling Maximum Allowable Offer (MAO) and projected profit.

Why use it?

Protects real estate investors from overpaying on renovation projects and losing capital.

Technical Scope & Calculation Limitations

Calculates standard rule-of-thumb MAO guidelines.

Frequently Asked Questions

The 70% rule states that an investor should pay no more than 70% of the property's estimated After Repair Value (ARV), minus the cost of repairs needed. The remaining 30% covers holding costs, financing fees, realtor commissions, and the investor's profit margin.

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