--72.188.xxx.xxx

I've flipped countless houses and have never heard of the "70% rule". Get the deal to make money and just buy it. Don't worry about the jargon. --50.32.xxx.xxx

I don't see any advantage in using other people's money when other people's money is really expensive. --98.146.xxx.xxx

Thanks. I'd always heard you were supposed to buy at no more than 65% of ARV, or 70%. (I've heard both %s used). --72.188.xxx.xxx

You want to be all in (purchase and repair) for way less than that if you can. --50.32.xxx.xxx

Personally, I would try to remove any of those rules of thumb from your mind. Hard numbers, that's what you need to look at. Guru catch phrases will burn you. --50.32.xxx.xxx

*correction: any concessions to the buyer. Seller assist is very common to buyers to help pay their closing costs. --50.32.xxx.xxx

The numbers I use, 25% net profit in my pocket after all expenses, commissions, closing cost times two, interest, utilities and buyer concessions. Make sure you are aware of any structural issues before hand, those can eat up profits and get no returns. Add about 10% to what ever your final cost number . Todays retail buyers are more educated than before. --173.216.xxx.xxx

--72.188.xxx.xxx

If you haven't flipped a house before the first couple stick with clean out, paint and flooring,that is enough to start learning and not get in too deep.I flip a lot of houses and in most cases in this economy I am not doing anything other than cleaning it out and putting it on the MLS as a fixer upper and letting beginners pay me too much to have there first project.The money is made on the buy so make sure you get a super price when you buy the place,MLS is not the place to be buying,too much competition,you need desperate sellers calling you,the more the better.I do bandit signs,ads in throw away papers and I mail letters to people in tax foreclosure --72.231.xxx.xxx

I noticed you all are referring to a loan as hard money. Why is it called hard money? --73.120.xx.xxx

Hard money is high interest and often points,as an example 15% and 5 points is common and minimum 6 months interest.This is usually offered by guys who have done a ton of flips and have the money to loan,know the neighborhoods and know when someone understands how to buy and sell quickly and make a profit.They are pros and they wont be talked into loaning money on a deal they know isn't going to be profitable. --72.231.xxx.xxx

There are no "rules" in real estate investing. You have to use your intellect to analyze each deal. How could you have a simple minded rule like "buy at 70% of ARV" when houses have different levels of repairs needed. On a house needing major work, 50% may be too high. You also need to consider transaction costs. In Philly, our transfer tax is 4.28%, while the rest of Penna. has only 2%. --73.141.xxx.xx

It's called hard money because it's secured by a "hard" asset, i.e. real estate. --204.210.xxx.xxx

Thank you Ken and Robin. --73.120.xx.xxx