The wholesale formula
Your maximum offer = (ARV × 70%) − repairs − your fee
Your end buyer is usually a flipper who follows the 70% rule: they will pay up to 70% of the after-repair value, minus repairs. Everything you earn has to fit underneath that ceiling.
A worked example
A house will be worth $289,000 fixed up and needs $42,000 of work. An investor’s maximum price is $289,000 × 70% − $42,000 = $160,300. If you want a $10,000 assignment fee, the most you can put the property under contract for is $150,300.
Getting the inputs right
- ARV comes from recent sales of renovated homes nearby, not from list prices or automated estimates.
- Repairs should be what your buyer would budget. If you underestimate, experienced buyers will notice, and the deal will not close.
- The percentage varies. In competitive markets buyers pay 75% or more; for landlords buying rentals, the number that matters is cash flow, not a percentage of ARV.
Stay inside the rules
Wholesaling is regulated differently in every state, and some require a real estate license or specific disclosures to market a property you do not own. Check your state’s rules and have an attorney review your contracts.