Does the 70% Rule For Flipping Refer To Cash On Cash ROI?

[Adam Edmondson]

As I understand the 70% rule, an example would be: If I buy a house for $60,000 cash and spend $10,000 in repairs, holding costs, closing etc., then it needs to sell for at least $100,000 to follow the 70% rule.

However, if I financed the $60,000 with an 80%LTV [I only put up $12,000 cash plus $10,000 in repairs holding costs, etc. ($22,000 Total)], does this same deal still follow the 70% rule if it only sells for $31,500? (since 22,000 < 70% of 31,500)