Question 1

What is the 70% rule in fix and flip investing?

Accepted Answer

The 70% rule states that an investor should pay no more than 70% of the After Repair Value (ARV) minus rehab costs. For example, on a property with a $300,000 ARV and $50,000 in rehab, the maximum purchase price would be: ($300,000 x 0.70) - $50,000 = $160,000. It is a quick filter, not a replacement for full deal analysis.

Question 2

What ROI should I target on a fix and flip?

Accepted Answer

Most experienced fix and flip investors target a minimum 15-20% ROI on invested capital, or a minimum $30,000-$50,000 gross profit per deal. However, your target depends on deal size, market conditions, financing costs, and your experience level. Always model your specific holding costs and financing before committing.

Question 3

How long should a fix and flip take?

Accepted Answer

Most residential fix and flip projects target a 3-6 month total timeline from acquisition to sale. Longer holds increase financing costs and reduce ROI significantly. Projects exceeding 9-12 months typically indicate scope creep, contractor issues, or market misjudgment.

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