The 70% Rule Explained: How to Calculate Maximum Purchase Price
The 70% rule is the most widely used formula in fix-and-flip investing. Learn how it works, when to use it, and when to break it.
Real estate is seasonal, and sophisticated flippers align their acquisitions and dispositions with market rhythms.
In most U.S. markets, real estate follows a predictable seasonal pattern. Spring (March–June) sees the highest buyer activity, prices, and sale velocity. Summer (July–August) remains strong but starts to slow. Fall (September–November) shifts toward balance. Winter (December–February) is the slowest, with the fewest buyers and often the lowest prices.
For flippers, this rhythm creates timing opportunities on both ends of the transaction. Acquisitions made in late fall and winter often see less competition, motivated sellers, and better pricing. A property that would fetch $200,000 in a March multiple-offer scenario might sell for $185,000 in January with minimal competition.
The ideal timeline for most flips is to acquire in October–December, renovate through winter, and list in March–April when buyer activity peaks. This alignment maximizes acquisition discount and disposition price. A typical 4-month flip that starts in November lists in March, prime selling season.
Working backward from a spring sale target, most flippers time their acquisitions as follows: a 3-month cosmetic flip targeting an April listing acquires in early January. A 5-month moderate renovation targeting a May listing acquires in December. A 7-month full gut targeting a May listing acquires in October.
Regional variations matter. Sunbelt markets have flatter seasonality, winter is their strongest season as snowbirds relocate. Northeast and Midwest markets have sharper seasonal swings with slow winters. Coastal California is relatively flat year-round. Calibrate your timing to local patterns by reviewing 3–5 years of monthly sales data in your market.
Be cautious of assuming every flip must align with spring. Markets with strong year-round demand (major metros, in-migration markets) have shorter off-seasons. Over-optimizing for seasonality at the expense of deal flow leaves money on the table. The best rule: always be willing to transact on a great deal, but default to seasonal alignment when you have the flexibility.
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