Purchasing Investment Properties at 70% of FMV??

[Timur Medaric]

Investors seem to throw out the 70% rule as a standard in purchasing investment properties. I understand that it varies by markets, but as markets continue to get more saturated and more competitive, is it fair to say that the 70% rule might be an outdated, over-generalized benchmark? Especially considering the dynamic and organic nature of these types of markets...

[Jon Klaus]

All markets are local, and competitive demand varies. That said, it is possible to buy at 70% of ARV, even in a hot market, it's just harder. Will Barnard is doing great at higher buying points, but the exit values are so high, that his absolute margin beats almost everyone else.

If you bend the "rule" too much, you could get burned, Do you have numbers on a deal you are considering as an example?