Does the 70% rule apply in SoCal?

[Arthur Fuller II]

I've noticed as I'm trying to analys deals that I'm see properties purchased at closer to 80% or if its a 70% of ARV there doesn't seem to be any room for rehab or holding cost. Should I be working from a higher starting point in my analysis or am I just seen people buy properties without doing their numbers correctly?

[Edward Alvarez]

yes it does. Buy above that and you might loose your shirt. If you see people buying at a higher % then either the rehab cost is very low or they are using their own personal funds to purchase and rehab. However if you plan to use hard money you better take into consideration financing cost, holding cost, rehab cost, sales cost etc... Im a local rehab flipper and the last 2 deals I purchased I got at 68-71% of ARV and they are both in L.A. Good luck guys!