How I Broke the 70% Rule and Still Made $50,000
Once the new HFS website is launched one week from now, I will be focusing a lot more on sharing with you specific deals I have going on. I think this will further help you see and learn what the house flipping business is all about.
One of the many deals we will analyze together is a property I recently flipped and closed on in Massachusetts. This Massachusetts property is of particular interest to me, because while putting this deal together, I broke one of my most important house flipping rules.
However I did not break this rule by mistake. I intentionally broke this rule because I knew a good deal could still be put together, and I could still turn a nice profit.
According to the 70% Rule my maximum allowed offer for this property would have been $115,000. Well I ended up getting this property for $120,000 - obviously breaking the 70% Rule.
I never like the break the 70% Rule, but the market was heating up and competition from other investors was very high. If you find yourself in a highly competitive market, you may have to bend the 70% Rule in order to get into deals.
I do not recommend rookie house flippers do this, especially for their first flip. Bending the 70% Rule can be dangerous, because you may end up losing money on the deal if any of your other projections are off. I made sure I was 110% confident with my after repair value of this house and my estimated cost of repairs.
I closed on this property last week, and am projecting a profit of more than $50,000. I explain how I made this happen in the Whiteboard Lesson below.
I am also filming follow up videos that dive even deeper into this specific deal, which will be available here at HFS next week.
Definitely keep me posted with what you think, and stay tuned for the NEW House Flipping School launching in 7 days.