Advice on Fix and Stay... then rent

[Michael Baradell]

Hey guys,
Im looking into purchasing a distressed property that will become my main residence. My current home will become my first rental property. The home I am looking to purchase will need extensive repair. My question is, would the 70% rule still come into play here since I am planning on living in the home for at least the next two to three years? I plan on holding this property as well when we decide to move again. I want to be sure I am not overpaying for the property, but being that I will be living there makes the numbers a little fuzzy to me. Should I act as if its a traditional fix and flip and go with the 70% rule? Here are some numbers: ARV= $190k - $200k. Two comps have sold for the $220k range recently but I'm staying very conservative. Rehab costs = $30k - $40k (total reno) home can be livable for $10k - $15k. Asking price is $150,000 reduced from $241,000. Any suggestions?