Every house-flipping calculator online uses some version of the same shortcut: Maximum Allowable Offer equals 70% of the after-repair value, minus repairs. The 30% that gets subtracted is supposed to cover closing costs, holding costs and your profit. The problem is that 30% is a national average pretending to be a fact about your specific deal — and the states this calculator covers show just how far it can drift.
The low end: Texas and Florida
Texas has no real estate transfer tax at all. Florida’s documentary stamp tax runs about 0.70% of price, paid by the seller. Between the two, an investor flipping in either state is spending closing-cost friction closer to 1–2% of ARV on the disposition side — well inside the room a 30% assumption leaves.
The high end: New Jersey and New York
New Jersey layers a graduated Realty Transfer Fee on top of a seller-paid mansion tax that now applies to sales of $1 million or more (1% to 3.5%, shifted to the seller in a 2025 law change). New York adds its own graduated buyer-side mansion tax inside New York City, on top of the ordinary state and city transfer taxes the seller already pays. On a $1.2M exit in either state, transfer-related costs alone can approach 2–4% of price — before title insurance, recording fees or agent commission are even counted.
What this means for your offer
If you use a flat 70% rule in New Jersey or New York the way you would in Texas or Florida, you are quietly assuming your closing costs are lower than they actually are — which means your real profit margin, once the deal closes, will be thinner than you planned.
The fix is not a different percentage — it’s the actual rule set
Swapping "70%" for "75%" or "65%" doesn’t solve the underlying problem, because the right adjustment is different for every state, county and hold period. The comprehensive Maximum Allowable Offer formula — ARV minus rehab minus acquisition closing minus disposition closing minus holding costs minus target profit — gives you the real number because each of those five deductions is calculated from the rules of the specific jurisdiction, not a national average.