03/04/2026
A lot of real estate rules were created in a very different market environment.
The 70% rule is one of them.
For years, it worked well because:
• Interest rates were low
• Rehab costs were stable
• Appraisals often supported aggressive offers
But in today’s environment, margins are tighter.
Higher borrowing costs, shifting construction pricing, and more conservative appraisals mean that many investors have adjusted their buy boxes.
Some are underwriting closer to 60–65% of ARV, depending on the deal.
The formula didn’t disappear.
The assumptions changed.
Curious to hear from investors in different markets:
What percentage are you buying at right now?