Nathan Payne explains why the 70% rule for property flipping doesn't work everywhere. Without knowing what actual buyers will pay in your specific market, you can't tell if a deal is real. The rule works in major markets but fails across regional variations in the US.
I got to hit you guys with the cold, hard truth. The cold, hard truth. And why do I do the painless way? Even if I run my numbers perfectly, even if I know the area extremely well, guys, there's a major problem in what we do here. We're not the buyer. We're not willing to take over the property. So we don't really know what someone's willing to pay unless we talk to everyone, right? Like, that's the main issue, unfortunately, is you never really know. I wish after doing this for 6, 7 years, I could say I know exactly when something's a deal. Well, I can when it's really low, when it's extremely low. I know it's a deal. That's why they teach you the 70% rule. That's why they're like, hey, if you can get a house for 70% of ARV minus repairs minus rehab, it's a deal. It's like, well, yeah, that's really low. That's— that works in most major markets, but that doesn't work all over the United States. Everywhere is different.
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