70% Rule
A screening guideline for house flips: pay no more than 70% of a property’s after-repair value, minus the estimated repair costs. The 30% margin is meant to absorb holding costs, selling costs, and profit. It is a rule of thumb, not a law — workable margins vary with price point and market conditions.
Related terms
ARV (After-Repair Value)
The estimated market value of a property after planned renovations are complete. ARV is usually derived from comparable sales of already-renovated properties nearby. Flippers and BRRRR investors work backward from ARV to set a maximum purchase price and renovation budget.
Wholesaling
Putting a property under contract and then assigning that contract to another buyer for a fee before closing, so the wholesaler profits on the spread without ever taking title. The model depends on finding deals below market value and having buyers ready. Rules on marketing properties under contract and on licensing vary by jurisdiction.
Comps (Comparable Sales)
Recently sold properties similar to a subject property in location, size, age, and condition, used to estimate what the subject is worth. Appraisers, agents, and investors adjust comp prices up or down for differences before settling on a value. The quality of a valuation is only as good as the comps behind it.