Which way to determine purchase price

[Terry Royce]

when you guys determine arv
you multiply the expected sales price by.7
Then subtract repair costs.
But, do you also subtract all the quiet costs?

I am looking at a house that's ARV is 225k needs about 20k, asking price is 139k. So judging by that my max purchase price would be 137k. Is that correct?

I used to use http://www.homefixers.com/calculator.php
However, my max purchase price they usually give me is higher than what I am getting using above.

help?