Hey Max,
Generally speaking, it is a case-by-case basis.The 70% rule is over-generalized and out dated. It's a nice rule of thumb(I suppose) but if you consider the organic nature of this market, ever-increasing competition and varying investment strategy options--the 70% rule is going to end up hurting you in the long run. According to your example above, you are making plenty of money and if you follow that rule, you are going to miss out on a $100,000+ profit because some Real Estate Guru wanted to sell a book. With regard to Hard Money Lenders, if their standard loan amount is 70%, you will most likely come out of pocket with the rest of the cash. However, there are many lenders that will lend on varying degrees of investments and just might lend you more, if there is money to be had. With that being said, you may be crossing into predatory lending if they aren't sticking to their own underwriting guidelines. Anyway, I hope you don't miss out on $100,000 because a of a ratio. Happy Investing!