ROI- Determining desired profit?

[David Robertson]

When analyzing properties to fix and flip, how do you determine desired profit? Do you use a %, monthly return on investment, overall return on investment? What is a reasonable/typical profit % or return on cash investment on rehabs?

I am currently analyzing 7 deals and all of the deals are between 50-70% return on cash investment. Majority of them netting 20-35K on homes that should retail for $100-200k. I am planning on doing the majority of the work myself.

Also, should profit determine asking price or should the asking price determine profit?

Which is the correct formula to use when analyzing deals?

ARV-offer price-renovation costs-loan costs-selling costs=profit

ARV-renovation costs- loan costs- selling cost-profit= Offer price