70% Rule Repair cost or Appeal cost?

[Jose Ortega]

When applying the 70% Rule to evaluate a property. Under "Repair" cost, do you evaluate what in fact "NEED" to be replace because is damage or you add a "REPAIR" cost because you want to upgrade? Example: a floor is in good shape(no need to be replaced) but you want to upgrade to a better tile. In this case it It'll cost more money to do so, but not necessary. My point is to give a final evaluation to the value of X property. Thank you!

[J Scott]

The rehab estimate is directly related to the ARV. If you did less rehab, the ARV is lower. If you did more rehab, the ARV will be higher.

You have to know BOTH the rehab estimate AND the ARV -- they go hand in hand.