70% rule
Hello BP,
I'm new to investing and know that typically one would use the 70% rule to analyze a property . I trying to get a better understanding on why not using this format would mess up a deal. If a property is listed at 380,000 and if approved for 295,000 due to the condition of the property and putting 40,000 into the property brings the cost to 340,000. That would leave 60,000 in profit. Plus 15,000 for an agent if used. So we are looking at 45,000. Can someone explain why this would not be a good deal. I know it is very basic . I just want to see if their are exceptions to this rule.
Thank you in advance.