Full Profit Projection Formula

Net Profit = ARV − Purchase − Rehab − Carrying (6% ARV) − Closing/Commissions (8% ARV)

If net profit is less than 15% of ARV, the deal needs renegotiation or needs to be passed.

Deal Walkthrough

Line ItemYour Deal
After Repair Value (ARV)
× Rule % (70% Rule)
% → $168,000
− Estimated Rehab Cost
= Maximum Allowable Offer (MAO)$113,000
Actual Purchase Price
− Carrying Costs
% ARV → −$14,400
− Closing + Commissions
% ARV → −$19,200
= PROJECTED NET PROFIT$43,400
Profit as % of ARV18.1% PASS

PLAY — this deal meets your minimum margin.

$43,400 profit is 18.1% of ARV (minimum 15%).

Assumptions