Core concepts
70% rule
Max all-in cost at 70% of ARV to absorb cost and time overruns.
Velocity discipline
Every 30 extra days erodes 1–2% of margin in carrying costs and risk.
Comp-matched finish
Match upgrade level to neighborhood comps — over-improvement destroys margin.
Examples
- $140k all-in, $200k ARV, 4-month timeline = $40k net profit after commission.
Practical applications
- Cash-builders pre-buy-and-hold.
- Active income alongside rental portfolio.
Common mistakes
- Underestimating timeline and carrying costs.
- Skipping comp analysis before purchase.
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