"The 70% rule is a filter, not a finish line. It tells you whether a deal is worth a closer look — the real numbers still have to hold up after that."David DonovanSarasota & Manatee Counties
Investors Hub / Fix & Flip Guide
Investing With David · Fix & Flip StrategyHere's the exact framework I walk through with every investor client before they make an offer in Sarasota — ARV, the 70% rule, realistic rehab costs, and a full ROI calculation, not just the sale price.
Sarasota-Manatee continues to attract buyers — from out-of-state relocators to young professionals priced out of South Florida. That sustained demand means flipped homes with quality finishes tend to sell well, especially in neighborhoods like Rosemary District, downtown Sarasota, Indian Beach, and Southside Village. But the biggest mistake new flippers make is falling in love with a property before running the numbers. Let's fix that.
The After Repair Value is what the home will be worth once it's fully renovated and ready to sell — everything else in your analysis flows from it. To find the ARV, you pull comparable sales (comps): recently sold homes in the same neighborhood that are similar in size, bed/bath count, and finish level to what your finished product will look like.
Sarasota neighborhoods can shift dramatically block by block — don't pull comps from outside the immediate area.
Anything older may not reflect current market conditions, especially in a market that moves quickly.
A 1,400 sq ft comp doesn't accurately value a 2,200 sq ft house — keep the comparison honest.
Your comps should reflect the finished quality you're targeting — updated kitchens, new flooring, fresh paint — not distressed properties.
I pull comps directly from the MLS for my investor clients — often with data that isn't available on Zillow or Redfin. If you're analyzing a deal in Sarasota, reach out and I'll pull the comps for you at no charge.
The 70% Rule is the quick-filter many experienced flippers use to decide if a deal is even worth deeper analysis. It's a rule of thumb, not a guaranteed formula — a starting filter before full underwriting, not a substitute for it.
Maximum Offer = (ARV × 70%) − Estimated Rehab Costs
Illustrative example: if a home has an ARV of $350,000 and you estimate $60,000 in rehab, your maximum offer works out to ($350,000 × 0.70) − $60,000 = $185,000. The 30% buffer covers profit, holding costs, closing costs on both ends, agent commissions, and cost overruns — it's not about being greedy, it's about having enough cushion so the deal still works even when something unexpected comes up.
They walk through a house, think "it just needs paint and carpet," and end up staring at a blown budget three months later. The ranges below are typical illustrative estimates from deals I've seen in this market — not a quote, and not a ceiling. Get your own contractor bids before you rely on any number here.
| Category | Light Rehab (Est.) | Full Rehab (Est.) |
|---|---|---|
| Roof | $0 – $2,000 (patch) | $10,000 – $18,000 |
| HVAC | $500 – $1,500 (service) | $5,000 – $10,000 |
| Plumbing | $500 – $2,000 | $5,000 – $15,000 |
| Electrical | $500 – $2,000 | $5,000 – $12,000 |
| Kitchen Remodel | $8,000 – $15,000 | $20,000 – $40,000 |
| Bathrooms (each) | $3,000 – $6,000 | $8,000 – $18,000 |
| Flooring (per sq ft) | $3 – $5 | $6 – $10 |
| Paint (interior) | $2,000 – $4,000 | $4,000 – $7,000 |
| Landscaping / Curb Appeal | $500 – $2,000 | $3,000 – $8,000 |
| Typical Total Range | $20,000 – $40,000 | $60,000 – $120,000+ |
Always add a 10–15% contingency buffer on top of your estimate. In Southwest Florida's humid climate, once walls are open you often find water damage, mold, or outdated wiring that wasn't visible during your walkthrough.
A real ROI calculation accounts for every dollar going out the door — closing costs on both ends, holding costs, and brokerage compensation on the resale. The figures below are one illustrative example, not a template to copy — plug in your own numbers for any deal you're evaluating.
| Item | Illustrative Example |
|---|---|
| Purchase Price | $185,000 |
| Rehab Costs | $60,000 |
| Assumed Buy-Side Closing Costs | $3,700 |
| Holding Costs (6 months: taxes, insurance, utilities, loan interest) | $12,000 |
| Assumed Brokerage Compensation on Resale | $10,500 |
| Assumed Sell-Side Closing Costs | $3,500 |
| Total All-In Cost | $274,700 |
| Sale Price (ARV) | $350,000 |
| Net Profit | $75,300 |
These figures are assumptions for this illustration, not typical rates or expected transaction costs. Actual closing costs vary, and brokerage compensation is negotiable.
ROI = (Net Profit ÷ Total Cash Invested) × 100
$75,300 ÷ $274,700 = 27.4% ROI in this illustrative example. The example shows how the assumed purchase, renovation, carrying, resale and transaction costs affect the scenario's projected return. If you're using hard money or a private lender, your cash-on-cash return will look different — but the core analysis stays the same.
Zillow estimates are not comps. Investors have overpaid by $30,000 or more relying on automated valuations — always use real MLS data with a local agent who knows the micro-market.
Southwest Florida's heat and humidity are hard on homes. Roof, AC, and plumbing issues are more common here than in other markets — if the home is 30+ years old, budget for surprises.
Every month the home sits costs money — loan interest, property taxes, insurance, and utilities add up fast. A flip that takes 9 months instead of 4 can eat your entire profit margin.
Putting a $50,000 kitchen in a neighborhood where comps top out at $280,000 doesn't add $50,000 in value — it just reduces your margin. Let the comps guide your finish level.
"The 70% rule is a filter, not a finish line. It tells you whether a deal is worth a closer look — the real numbers still have to hold up after that."David DonovanSarasota & Manatee Counties
I work exclusively with serious investors in the Sarasota-Manatee area — finding off-market deals, pulling comps, and helping you run the numbers before you commit. Tell me exactly what you're looking for and I'll reach out the moment a deal matches your criteria.
I'll reach out as soon as I find a deal that matches your criteria, and I'll follow up personally.
Prefer to talk it through first? Talk With David