Calculating ARV Formula

[Joseph Hernandez]

Hello. I'm reading two different methods of calculating max offer. Max offer = ARV X 70% - rehab costs. Also,

Max Offer = ARV – Cost of Repairs – Buyer’s Profit – Wholesale Fee – Other Costs

Which is correct? why are there two different formulas? The second formula seems too high for the seller. Other costs can include closing costs, holding costs and if the seller is in foreclosure, he needs his arrears paid and most likely another 10k to move out.