Fixing & Flipping Houses by Jacob Peterson

Author:Jacob Peterson
Language: eng
Format: epub
Tags: Fixing & Flipping Houses, Real Estate Investors, money and investment, real estate, business
Publisher: Guava Books
Published: 2017-02-23T00:00:00+00:00

Know the 70% Rule

Although the source is unknown, most experienced flippers swear by the 70% Rule. The application of the Rule is as follows:

You find a home and either you or your real estate agent determined that after the house is repaired or renovated, you can sell it for $100,000.

Multiply the $100,000 to 70%, this equals to $70,000.

Deduct your repair or renovation expenses from the $70,000. Whether according to your own or an expert’s estimate, the cost of the repairs along with the other contents of your budget, is $20,000.

Subtract $70,000 to $20,000, this equals to $50,000.

$50,000 is the absolute maximum amount that you can pay for the house.

If you follow this rule, this will provide you with more protection in gaining a profit or in the worse scenario, just breaking even.

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