70% Rule In DFW and Other Hot Markets

[JayCinta Henry]

Question 1:

Is anyone hitting the 70% rule in the DFW market or any other similarly hot markets? If not what have you resolved/accepted  to be your new acceptable margins? How are they working out?

Question 2:

Here is my deal, I am going to walk the property today with a contractor and a foundation repair guy. 

Property is from a major wholesaler, on a first come first served basis. 

Price $163K

ARV 230-245K comps comparisons

Rehabbing costs TBD but goal is sub $40k, likely $25-30k.

Financing is 20% personal cash, 80% hard money with 100% rehab costs, final terms TBD

This is all the info I have for now. Thoughts?

[Sergey A. Petrov]

$163k+$40k is roughly $200k. Sale price of $230 less 10% selling expenses is roughly $210k. That gives you a $10k spread. What are your carrying and holding costs? And overruns on construction plus potentially extended time on the market and/or price reductions in a softening market? Too slim of a margin in my mind…