CalculateRealEstateROI

BRRRR

70% Rule

Maximum offer = 70% of ARV minus rehab costs.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Heuristic that builds in margin for cost overruns, holding, and resale costs.

Formula

MAO = (0.70 × ARV) − Rehab Cost

Examples

  • ARV $200k − $40k rehab = $140k × 0.70 − $40k = $58k MAO. Wait — Max offer = (0.70 × $200k) − $40k = $100k.

Common mistakes

  • Stretching past 70% in hot markets and getting squeezed.

Related questions