Many people use the 70% rule when deciding whether a house flip is a good deal or not. The rule states that The purchase price should be The ARV, multiplied by 70%, minus the repairs. This rule can work in some cases, but in many other cases, it does not work well at all.
In this video, I go over a few examples of how it can and cannot work including some of my properties that we recently flipped and sold. You can also make your own rule that may be 70, 75, 65, 80, or some other percentage to decide what works in your area and your market. I prefer to write out the numbers and not use rules at all!
Analyzing flips is not easy but it is easy to get yourself into trouble if you buy the wrong project or pay too much. The 70% rule can cause you to do both if you are not careful!
This article also goes over the details. https://mk0investfourmowbbak.kinstacdn.com/wp-content/uploads/70-percent.png
Here are a few more videos I discussed:
The house flip we bought for $200,000: https://www.youtube.com/watch?v=Y62iYvcxuvY
How to Figure ARV: https://www.youtube.com/watch?v=0keA0q76M7g&t=8s
How to figure repairs: https://www.youtube.com/watch?v=qMQR0v9cako&t=226s
How to Finance Flips: https://www.youtube.com/watch?v=lo1NFwc1U8Q&t=2s
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Mark Ferguson’s purpose is to help as many people as he can become financially free through real estate.
Mark has been a real estate investor and real estate agent since 2001, after graduating from the University of Colorado. Mark has flipped over 200 houses and routinely flips 15 to 25 houses a year. Mark owns 190,000 square feet of rentals and is the managing broker and owner of Blue Steel Real Estate. Mark has also written 9 books that you can find on Amazon https://amzn.to/2VGI6a9
Mark started InvestFourMore in March of 2013 to discuss his rental property investing techniques. Mark expanded InvestFourMore to talk about his flipping business and real estate agent business. InvestFourMore now has 300,000 views a month and is one of the top real estate blogs.
House Flip Before and After Playlist: https://www.youtube.com/playlist?list=PLoQKPI7WPeHiFSiYYgYuorUP_STuYa0Vw
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