70% Rule Calculator (Real Estate)
This calculator helps investors quickly estimate a safe maximum purchase price using the 70% rule and customizable percentage variants. It includes repair contingency, acquisition/closing costs, holding costs, target profit, and estimated fees to produce a defensible maximum offer.
Use the standard 70% rule as a guideline; change the rule percentage and cost assumptions to reflect local market conditions and your specific risk tolerance. Results are estimates and should be validated with detailed scope-of-work bids, title and closing estimates, and lender terms.
Governance
Record e27660ec6b67 • Reviewed by Fidamen Standards Committee
Classic 70% rule: Max Purchase = (ARV × Rule%) − Repairs − Acquisition/holding costs − Target profit − Fees. Uses a rehab contingency added to repair estimate.
Inputs
Results
Max Purchase Price (per rule)
$92,000.00
Implied Profit Margin (%)
3750.00%
Repairs (with contingency)
$22,000.00
Rule Base (ARV × Rule%)
$140,000.00
| Output | Value | Unit |
|---|---|---|
| Max Purchase Price (per rule) | $92,000.00 | USD |
| Implied Profit Margin (%) | 3750.00% | % |
| Repairs (with contingency) | $22,000.00 | USD |
| Rule Base (ARV × Rule%) | $140,000.00 | USD |
Visualization
Methodology
The core principle: Max Purchase Price = (ARV × Rule%) − Repairs (with contingency) − Acquisition/holding costs − Target profit − Estimated fees. The calculator adds a percentage contingency to repair estimates to account for unknowns.
This tool is designed for rapid screening. For production use and accounting compliance, validate inputs and results against formal cost estimates and financial controls. Software development and testing practices referenced: NIST SP 800 series for secure computing processes and IEEE software engineering best practices for correctness and testing.
Key takeaways
Use the standard 70% rule as a starting guideline but adjust the rule percentage and all cost inputs to reflect localized data and verified estimates.
This calculator is for screening and preliminary offer planning. Always corroborate with third-party estimates, title commitments, and lender approval before finalizing a purchase.
Worked examples
Example 1 (standard): ARV $200,000; Repairs $20,000; Contingency 10%; Acquisition $5,000; Holding $2,000; Target profit $15,000; Fees 2%. Rule% 70 → Max Purchase ≈ (200,000×0.7) − 22,000 − 5,000 − 2,000 − 15,000 − 4,000 = $99,000 (approx).
Example 2 (market adjustment): Using a 65% rule in a hot market will reduce the Rule Base and therefore the Max Purchase price, helping preserve margin when ARV estimates are uncertain.
F.A.Q.
Is the 70% rule a strict rule I must follow?
No. The 70% rule is a heuristic to protect margin during renovations and sale. Market dynamics, financing terms, and verified cost estimates may justify deviations. Use this tool to test sensitivity but do on-site due diligence before committing capital.
Why include a rehab contingency?
Contingency accounts for unforeseen issues discovered during renovation. Including a contingency reduces downside risk and improves accuracy of the Max Purchase calculation.
How accurate are the results?
Results are estimates based on your inputs. Accuracy depends on input quality (ARV appraisal validity, contractor bids, fee estimates). For software quality and data handling we recommend following IEEE and NIST best practices for input validation and testing. Do not treat outputs as audited financial advice.
Are safety or workplace regulations considered?
This calculator does not replace compliance checks. For onsite work, follow applicable occupational safety regulations such as OSHA standards and local building codes when estimating labor, timelines, and costs.
Sources & citations
- NIST — National Institute of Standards and Technology — https://www.nist.gov
- ISO — International Organization for Standardization — https://www.iso.org
- IEEE — Institute of Electrical and Electronics Engineers — https://www.ieee.org
- OSHA — Occupational Safety and Health Administration — https://www.osha.gov
- HUD — FHA Single Family Housing Policy Handbook 4000.1 — https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1
- HUD — Property Valuation and Appraisals (HUD 4155.2) — https://www.hud.gov/sites/documents/4155-2_4.pdf
- Fannie Mae — Selling Guide — https://selling-guide.fanniemae.com/
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: e27660ec6b67What changed (latest)
v1.0.0 • 2025-11-01 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-01 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 1, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-01 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 42633d47c975