I've not been a big fan of the formulaic way that a lot of people use percentages to come up with the buy price on a flip as really isn't that accurate. In our investment arm, we use the MLS (we have real estate licenses) to do a CMA (comparative market analysis) using solid comps to come up with the ARV. That's our starting point, then we back out the profit we want to make, closing costs on both sides of the transaction (buy and sell) including real estate commissions, the scope of work from our contractor(s), the time value of money (interest and holdings costs for the loan), and we add in 5%-10% for a "Contingency Reserve" for those unexpected items that pop up. From that, we get our "Strike Price", which is our term for the highest amount we'll pay for the property. We've found over the years that percentages that oversimplify the process can really skew the numbers and we don't get a accurate of a result. At least that's how we do it. I hope that helps.