What is the 70% ARV rule for flipping??

[Yosef Fares]

I think i understand it but not sure. From what i think it is, you take 70% of the ARV and that's what you initial purchase price should be for the property. Does this take into account renovation or is the reno money added on to this number? I listened to a podcast where they were discussing this but i still need more clarification. Sorry if this is a dumb question i just really want to understand as much as I can.