A Question for the seasoned!

[Raul F.]

First of all, I'd like to introduce myself and want to thank the community for the wealth of information created here. I looked around for a few days, and haven't been able to find an answer to my question, so I figured I'd ask! :D

Ok, so this is hypothetical and designed to help me understand the process to avoid hours of wasted time.

Let's assume I found a home that I wanted to put an offer on. I did my due diligence and estimated ARV at $100,000 (keeping it easy with round numbers :D). Because I read this forum, I know investors will only pay 70% of that value tops after repairs. Which means $70,000. I call my contractor, he tells me this house needs $10,000 in repairs.

This is where I get a bit lost, If it's 10K in repairs, an investor would only want to pay 60k because 60k + 10k = 70k which is 70%, correct?

Assuming I'm right, If 60K is what I can sell it for, and I want to make, let's say $3k on it. I would then offer 57K, correct?

If I am correct again, what would I do if I come to find out the current owner owes more than 57K on a mortgage? Do I call it a day and walk away?