The 70% rule in real estate can be helpful when comparing properties and making a final determination on which one is the best investment. Understanding the ins and outs of this rule is imperative to using it to your advantage. 

What Is the 70% Rule?

The 70% rule is a formula commonly used by real estate investors as a barometer when purchasing distressed properties for a profit. The formula calculates the maximum amount to pay for a given property once two key factors—the after-repair value (ARV) and estimated repair costs (ERC)—are considered.

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