I just started researching real estate about 2 weeks ago and i want to get into wholesaling because i have no money upfront. In the ARV x .70 equation im not sure i understand what the .70 really means because ive seen people use .6 and .8 so if anyone would let me know thatd be great thank you.
Its a rule of thumb... typically a purchase price of 70% of market value is enough wiggle room for a flipper to profit, and for you to make your assignment fee. I have learned that these "rules" or "formulas" are very general and will depend on your target market, and end buyer.
For example, a doctor or lawyer who is looking to park their cash may be willing to pay more, than an investor who's looking to make a profit. In the latter, an investor will definitely need more equity to make sense of the deal.