📝 Blog

Strategy

The 70% Rule: How to Calculate Max Offer

The 70% rule is a simple formula used by real estate investors to determine the maximum price they should pay for a property. Here's how it works...

Formula: Max Offer = (ARV × 70%) - Repair Costs

For example, if a property has an ARV of $300,000 and needs $40,000 in repairs:

Max Offer = ($300,000 × 0.70) - $40,000 = $170,000

This ensures you have enough margin for profit, holding costs, and unexpected expenses. Use our Max Offer Calculator to automate this calculation.

Wholesaling

How to Find Cash Buyers for Your Deals

Finding cash buyers is essential for wholesalers. Here are the best ways to build your buyer list:

1. Driving for Dollars — Look for vacant properties and research the owners

2. Networking — Attend REIA meetings and real estate meetups

3. Online Platforms — BiggerPockets, Facebook groups, Craigslist

4. Direct Mail — Send letters to absentee owners and pre-foreclosure leads

5. Public Records — Search for recent cash purchases in your area

Use our Buyer List tool to manage and organize your contacts.

Analysis

Understanding Cap Rate vs Cash-on-Cash Return

Two key metrics every investor should know:

Cap Rate = Net Operating Income / Property Value

This measures the property's return independent of financing. A 7% cap rate means the property generates 7% of its value in annual income.

Cash-on-Cash Return = Annual Cash Flow / Total Cash Invested

This measures your actual return on the money you put into the deal. It accounts for financing.

Use our Cap Rate Calculator and Cash-on-Cash Calculator to analyze deals.

Tips

5 Mistakes New Real Estate Investors Make

1. Not running the numbers — Always use calculators before making an offer

2. Underestimating repairs — Add 20% contingency to your repair estimates

3. Ignoring holding costs — Factor in taxes, insurance, utilities, and financing

4. Skippping due diligence — Always do inspections and title searches

5. Going alone — Build a team of agents, contractors, and lenders

Use our Deal Score Analyzer to avoid these mistakes.

Strategy

BRRRR Strategy Explained

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It's a popular strategy for building wealth through rental properties.

Step 1: Buy — Purchase a property below market value

Step 2: Rehab — Renovate to increase value

Step 3: Rent — Find quality tenants

Step 4: Refinance — Pull out your initial investment

Step 5: Repeat — Use the money for the next deal

Use our BRRRR Calculator to analyze BRRRR deals.