# House Flipping Formulas

## Overview

One of the most important things you should learn before you purchase your first house flip is how to analyze the Maximum Purchase Price that you should offer for a property.  In this lesson, we are going to learn the math and formulas behind analyzing the Maximum Purchase Price you should offer for a property.

There are two different formulas used for calculating the Maximum Purchase Price that you should offer for a property:

1. 70% Rule Formula  (quick analysis)
2. Maximum Purchase Price Formula (detailed analysis)

## 70% Rule Formula

Based upon years of experience, flippers developed a quick rule of thumb called the 70% Rule to help them quickly evaluate the value of a potential flip property.

The 70% Rule states that you should buy a property at 70% of the After Repair Value minus the repair costs.

<span style="padding: 6px;margin-right: 6px;font-size: 16px;"class="lesson-quote--tag blue">Maximum Purchase Price</span>= (After Repair Value * 70%) - Repair Costs