70 Percent Rule Calculator
This calculator is designed to help you determine how much you should invest in a home with the intention of buying and quickly reselling it.
Fix And Flip 70 Percent Rule Calculator.
Investors need to know the numbers before they jump in and make an offer on a house.
If you’re looking to get into the real estate game, then there’s a lot of things that you need to keep in mind. One of these is the Fix and Flip Rule. This rule states that no more than 70% of your budget should go towards purchasing a property so that you can put down some money for repairs and still have enough left over for advertising, marketing, and other fees associated with flipping a house.
Not following this rule can be a recipe for disaster, so it’s important to learn how you can stay within 70% of your budget before embarking on your first flip.
The first step is to create a detailed budget so that you know what expenses are involved in finding, renovating, and selling a house. For example, if the average cost per square foot of renovation for this type of property is $40 per square foot, then you’ll need to multiply that by the number of square feet in the property. If a house is 1,500 square feet and you’re planning on spending $40 per square foot for renovations, then that’s going to cost you $60,000.
If your budget allows, it might be a good idea to allot $5,000 more for unexpected costs that could pop up during renovations. If the house has an extra bedroom or if you’re planning on adding a second bathroom than what was previously there, then it’s going to cost you more money. It’s better to have the extra money in your budget so that you can pay these extra fees than to rush and end up having to ditch the project.
If you’re struggling to stay within your budget, then you might need to scale back some of the features that you want on your house. For example, if the bathroom has marble countertops and a $20,000 price tag, then reconsider whether or not you really need those elements in your renovation. You can also look for hidden costs that you may have forgotten about. If there’s basement space, then it might be a good idea to make sure that the floor is waterproofed so that you don’t end up with mold issues later on.
If you’re really having trouble staying within your budget, then look into other ways of raising money like taking out a loan, using your credit card, or even borrowing money from friends or family members. You’ll need to weigh the pros and cons of all these options before deciding which is the best method for you.
If you follow these steps when creating your budget, then you should be able to stay within 70% of it without any problems.
If you’re looking to take on your first fix and flip project, then it’s a good idea for you to know the 70% rule for flippers. You can check out our guide on flipping properties here: Real Estate Discussions