The 70% Rule, Explained: Calculating Your Maximum Allowable Offer

The 70% rule is a back-of-the-napkin formula investors use to decide the most they should pay for a property: Maximum Allowable Offer = (ARV x 0.70) - repair costs.

A quick example

If a home's After-Repair Value (ARV) is $300,000 and it needs $40,000 in work, your MAO is (300,000 x 0.70) - 40,000 = $170,000. As a wholesaler, you'd then build your assignment fee into that number.

When to break it

In hot markets with low inventory, disciplined investors sometimes stretch to 75-80% because resale is fast and predictable. The rule is a starting point, not a law. KeySwap's AI Deal Analyzer runs this math instantly and flags deals that beat the 70% rule as "Hot Deals" on your dashboard.