Many investors estimate their maximum offer as 70% of the after-repair value (ARV) minus repairs. Use this tool to see what that formula gives for your home, and to check whether an offer you received is in the usual range.
70% rule calculator: what should an investor offer?
Investors often estimate a maximum offer as ARV x 70% minus repairs. Use this to see whether an offer you received is in the range investors use. It is a rule of thumb, not an appraisal.
The 70% rule is one common investor guideline. Actual offers depend on the buyer's financing, holding costs, market and risk. Get several written offers and an agent's opinion of ARV.
What the 70% rule is
The 70% rule is a guideline used by house flippers: maximum allowable offer (MAO) = ARV × 70% − repair costs. The 30% that is left over is intended to cover the investor’s financing costs, holding costs (taxes, insurance, utilities), buying and selling costs, and profit. It is not a law or a standard; some investors use 65%, 75% or 80% depending on their costs and market. HomeLight, for example, describes it as an industry guideline and not a policy of any one company.
How to use it
- Estimate ARV. Ask an agent for recent sales of similar, renovated homes nearby. ARV is what the home would sell for after repairs, not today’s as-is value.
- Estimate repairs. Use contractor bids for big items (roof, foundation, HVAC, electrical, plumbing) and a cushion for the unknown. Investors usually add a contingency.
- Choose the percentage. Start with 70%. Try 65% for a risky, hard-to-resell home and 75% to 80% for a strong market with a simple renovation.
- Enter an offer you received to see how far it sits from the formula.
Worked examples
| Light repairs | Heavy repairs | |
|---|---|---|
| ARV | $300,000 | $300,000 |
| Repairs | $20,000 | $80,000 |
| 70% of ARV | $210,000 | $210,000 |
| Maximum offer | $190,000 | $130,000 |
| As % of ARV | 63% | 43% |
The same ARV produces very different offers because repairs come off dollar for dollar. That is why accurate repair estimates matter. A seller who documents repair costs with bids often hears fewer vague deductions.
What the result means for you
- Your offer is near or below MAO: the buyer probably used a similar formula. You may still have room to negotiate if you can show lower repair costs or a higher ARV.
- Your offer is well above MAO: be careful. It may come from a buyer with lower costs, or it may be a “vanity offer” from a wholesaler who plans to cut the price later. Ask for proof of funds, put down real earnest money and watch for an “and/or assigns” clause.
- Several offers differ widely: ask each buyer for their ARV and repair assumptions. The gap often comes from those two numbers.
Limits of this tool
- It is a rule of thumb, not an appraisal or valuation.
- It does not model financing rates, holding time, local transfer taxes or a buyer’s individual profit target.
- Owner-occupant buyers, iBuyers and landlords price homes differently from flippers.
Frequently asked questions
What does ARV mean?
ARV is after-repair value: the estimated sale price of the home once it has been fully repaired and updated, based on comparable sales.
Is 70% what every cash buyer pays?
No. It is a guideline for investors who repair and resell. Many buyers pay more or less depending on market, financing, repairs and their goals.
Why is the cash offer so far below market value?
The buyer subtracts repair costs, holding and selling costs and a profit margin from ARV. Our guide on cash offer vs. traditional listing compares what you net either way.
How can I get a higher offer?
Get several written offers, document repairs with bids and inspection reports, and make the house easy to access. See how to sell a house as-is.
About this tool: built and maintained by the Cash Home Hub editorial team following our editorial policy. Last reviewed November 2026. It runs entirely in your browser, stores nothing and is for education, not legal, tax or financial advice.