Flipping Houses: The 70 Percent Rule

Have you ever heard of the 70 percent rule when it comes to flipping houses? If you’re just starting to look into flipping houses, you might have heard of the 70 percent rule. This house flipping tip suggests that an investor should only pay 70 percent of the After Repair Value (ARV) of a property minus any needed repairs. The ARV is the value of the property after it’s been completely repaired. So, once you’ve put all the repairs in, what would the house be worth?

To follow the 70 percent rule, you’d take the amount that the home is worth once you’ve fully repaired it, then multiply that amount by 0.7, then subtract the cost of the repairs that you expect to have to complete. The final calculation is what investors should aim for when paying for a home they intend to flip.

Are You Looking for a Hard Money Loan to Flip a House Or Buy A Rental Property?

Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about seven to ten days.

Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.