depending on the grade of property, work the deal backwards to determine your purchase price.

Some investors use it to filter prospects, some private lenders use it as a threshold for their terms, etc but other than that, it's just an indicator.When I analyse a project, I always work backward from the minimum profit I want to make....next is ARV.....from there, I calculate all other expenses (including closing costs on the purchase and sale) and work down to the bottom line.I use a private lender that doesn't know or care about the 70% rule so I don't use the rule.

I was working my way backwards.

This could potentially limit your buying pool when you go to sell the property, if it's not FHA approved.)If you want to know about cash flow, find units renting in the same or nearby projects and work backwards with the financing or funds you are using and the HOA fee.

H Scott,Analyze how much money you have to get started and then works backwards toward planning your goals.

It is hard for me to believe that if one bent over backwards and required all of this prior to accepting investment dollars that they'd be facing stiff punishments.

Don't work it backwards.

But you're applying it backwards.

An option conveys an equitable interest.Tenants can cut grass, clean, do you really want them changing a HVAC filter and putting it in backwards?

You're applying this (stupid) rule backwards.