Nathan Payne argues that the 70% rule for house flips doesn't work everywhere. Investors can't predict what buyers will actually pay without talking to the market first. Perfect math on a deal means nothing if no one wants to buy it.
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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