House Flipping Rule

The house flipping rule is a simple concept that can be used to determine the value of your house. It’s not easy to know what your house is worth in today’s market, but if you follow these steps it will help you get an idea of how much money you can expect when selling your home. Here we are discussing some tips on how to use this formula with Hirsh Mohindra:

You need a reliable appraisal or opinion from a real estate agent or appraiser who has experience in valuing homes for sale. The appraisal should include all costs related to the property and any improvements made over the years. This includes items such as roofing, plumbing, etc.



If you are looking to buy a home and flip it, then you need to know the 70 percent rule. The 70 percent rule is an important guideline for buying homes that have been flipped. This is because when you buy a home that has been flipped, there will be a tax tacked on to your purchase price for flipping houses.

What Is The 70 % Rule?

Hirsh Mohindra: The 70% rule states that an investor should pay 70% of the home’s after-repair value minus the repairs needed. If a homeowner needs $25,000 in repairs, then the 70% rule states an investor should pay $80,000 for the home. In other words, if you think you can get $150,000 worth of the house for only $80,000 and it will be worth $150,000 after all is said and done, this may be something to consider.

Why The 70% Rule Does Not Work On Expensive Homes

The 70% rule does not work well on expensive homes. Finding a property for $100,000 or less is not easy. The rule is designed to ensure that you are buying your flip with an annualized return of 7%. When the property costs more than $200,000 it becomes much harder to find flips that meet this rule.

Can Wholesalers Use The Rule?

The 70 percent rule is a guideline that real estate wholesalers can use. The rule states that you can wholesale a house or flip for an amount ranging from 70 percent to 80 percent of what it will cost the buyer to buy, fix and flip the property. A wholesaler should know what another investor will pay for a home and then figure out what they can sell it for and make sure they get their money. This rule is helpful if your wholesaler is trying to sell their properties quickly and you are trying to determine what they can get paid on a property.

Wrapping-Up:

The 70% rule is a decent guideline in certain markets, but it needs to be placed in context. If you are struggling to find deals that meet the 70% rule, it could be because you aren’t buying in a market with very expensive real estate, and this rule guides you to not pay too much for your house. In other cases, the 70% rule can be too much for houses if you are buying in a market with cheaper homes. Hirsh Mohindra prefers not to follow rules and instead writes out numbers for each deal.

Originally Posted: https://medium.com/hirsh-mohindra-chicago/house-flipping-rule-with-hirsh-mohindra-ddca437e1595

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