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70 Percent Rule Calculator

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Important Formulas of Mortgage and Real Estate

✖After Repair Value is the estimated value of a property after it has undergone necessary repairs or renovations, typically used in real estate investment calculations.ⓘ After Repair Value [ARV]			+10% -10%
✖Estimated Repair Costs refer to the projected expenses required to restore or improve a property, usually calculated before initiating renovation or maintenance work.ⓘ Estimated Repair Costs [ERC]			+10% -10%

✖Maximum Buying Price is the highest amount a buyer is willing to pay for a property, determined by factors such as market conditions, property value, and budget constraints.ⓘ 70 Percent Rule [BP_max]

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70 Percent Rule Solution

STEP 0: Pre-Calculation Summary

Formula Used

Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs
BP_max = (ARV*0.7)-ERC
This formula uses 3 Variables

Variables Used

Maximum Buying Price - Maximum Buying Price is the highest amount a buyer is willing to pay for a property, determined by factors such as market conditions, property value, and budget constraints.
After Repair Value - After Repair Value is the estimated value of a property after it has undergone necessary repairs or renovations, typically used in real estate investment calculations.
Estimated Repair Costs - Estimated Repair Costs refer to the projected expenses required to restore or improve a property, usually calculated before initiating renovation or maintenance work.

STEP 1: Convert Input(s) to Base Unit

After Repair Value: 70000 --> No Conversion Required
Estimated Repair Costs: 5500 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

BP_max = (ARV*0.7)-ERC --> (70000*0.7)-5500

Evaluating ... ...

BP_max = 43500

STEP 3: Convert Result to Output's Unit

43500 --> No Conversion Required

FINAL ANSWER

43500 <-- Maximum Buying Price

(Calculation completed in 00.005 seconds)

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Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< Important Formulas of Mortgage and Real Estate Calculators

Monthly Mortgage Payment

LaTeX Go Monthly Payment = (Mortgage Amount*Interest Rate*(1+Interest Rate)^Compounding Periods)/((1+Interest Rate)^Compounding Periods-1)

Price per Square Foot

LaTeX Go Price per Square Foot = Property Sale Price/Total Square Footage

Rental Yield

LaTeX Go Rental Yield = (Annual Rental Income/Property Value)*100

Debt Ratio

LaTeX Go Debt Ratio = Total Debt/Total Assets

70 Percent Rule Formula

LaTeX Go

Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs
BP_max = (ARV*0.7)-ERC

What is 70 Percent Rule ?

The 70 Percent rule in real estate investment is a guideline used by investors to estimate the maximum purchase price they should pay for a property based on its After Repair Value (ARV) and estimated repair costs. The rule suggests that investors should not pay more than 70% of the ARV minus estimated repair costs to ensure a sufficient margin for potential profit after accounting for expenses and contingencies.

How to Calculate 70 Percent Rule?

70 Percent Rule calculator uses Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs to calculate the Maximum Buying Price, The 70 Percent Rule helps you and your client determine whether or not they should invest in a property. Maximum Buying Price is denoted by BP_max symbol.

How to calculate 70 Percent Rule using this online calculator? To use this online calculator for 70 Percent Rule, enter After Repair Value (ARV) & Estimated Repair Costs (ERC) and hit the calculate button. Here is how the 70 Percent Rule calculation can be explained with given input values -> 43500 = (70000*0.7)-5500.

FAQ

What is 70 Percent Rule?

The 70 Percent Rule helps you and your client determine whether or not they should invest in a property and is represented as BP_max = (ARV*0.7)-ERC or Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs. After Repair Value is the estimated value of a property after it has undergone necessary repairs or renovations, typically used in real estate investment calculations & Estimated Repair Costs refer to the projected expenses required to restore or improve a property, usually calculated before initiating renovation or maintenance work.

How to calculate 70 Percent Rule?

The 70 Percent Rule helps you and your client determine whether or not they should invest in a property is calculated using Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs. To calculate 70 Percent Rule, you need After Repair Value (ARV) & Estimated Repair Costs (ERC). With our tool, you need to enter the respective value for After Repair Value & Estimated Repair Costs and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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