House flipping in New York: 70% rule, holding costs, and what kills deals

Flipping in New York: the 70% rule applied here

The 70% rule says your maximum allowable offer (MAO) is 70% of ARV minus rehab. It's a smoke test, not a precise formula, but it works as a quick filter.

In Buffalo, where ARVs typically sit in the $180k-$260k range, that math runs like this:

ARV: $260,000 (high end of comps)
70% of ARV: $182,000
Less $30k typical rehab: MAO = ~$152,000

If you can't buy under that, the math doesn't work. Use the fix-and-flip calculator for your specific deal.

What New York flippers actually deal with

Property taxes during holding: 1.4% statewide average. On a $180,000 purchase held for 6 months, that's $1,260 in taxes alone - not the largest line item but rarely budgeted by new flippers.

Permit + inspection cycles: notoriously slow - 6-12 weeks for major scope items is normal. Bake that into your timeline.

Holding costs to budget:

Mortgage/hard money interest: 10-12% APR on hard money is standard now. On $180,000 that's $1,650-1,800/mo
Insurance (vacant + builder's risk): $150-300/mo
Utilities + lawn care: $200-400/mo
Total: figure $1,200-1,800/mo holding cost on a typical Buffalo flip

A 6-month flip = $7-11k just in carry. That comes out of your spread.

What kills New York flips

Upstate NY is a different market than NYC - much more landlord-traditional, cash-flow possible. NYC + Long Island are stabilized-rent + rent-controlled landmines.

The common New York-specific deal-killers:

Underestimating insurance during the rehab period. Builder's risk policies are usually findable but quote each one - underwriting standards have tightened.
Comping to the wrong street. Buffalo's neighborhoods can flip from B-class to C-class across a 4-block stretch. Use comps within 0.5 miles and don't trust auto-valuation models on transitional blocks.
Rehab scope creep. Lock the scope before close, get fixed-bid contracts where possible. Cost overruns of 20-30% are common and they eat the spread fast.

The actual go/no-go targets

For a flip in New York to actually work:

Profit margin: $25-40k minimum on a $200-350k ARV flip. Below $25k and one bad week of carry kills it.
Annualized ROI: 25%+ on cash-in. Lower than that and you're better off in a buy-and-hold.
Days on market estimate: <90 from listing. Buffalo has slower DOM than it did in 2021-22; price aggressively to move.
Exit price as % of comps: 95-100% of the top comp, NOT the average. Don't expect to be the #1 comp on the street.

When New York is + isn't the right state for flipping

New York's lower-priced metros (Buffalo, Rochester) still have flip-friendly margins because the absolute dollar spread on a $180,000 purchase + rehab is meaningful relative to the carry costs.

Run your specific deal through the fix-and-flip calculator - holding cost reality and the 70% rule sanity check will tell you in 2 minutes whether to drive out for the walk-through or not.