I've been reading up on the terms/definitons and formulas and have memorized a good majority of the basics. 

Is there a formula?

By the formula (70% of ARV less costs) he could recoup.Once again, I appreciate your perspective.

This basically frees up $90,000.I'm sure there is a formula for this but basically for taking out a mortgage to make sense you would have to make more on the $90,000 less taxes than you pay in interest less tax benefits on the $100,000.

Dave has a get rich slow formula. 

If you are only looking at some formula to make offers, then you probably do not know the market well enough to be making realistic offers.The market doesnt operate like a spreadsheet.

Based on this formula, the max I can spend on repair is $40k and I will still clear $20k profit (I may be missing realtor fees on the rehab purchase but the 30% provides enough cushion for me).

I need to be convinced that 70% formula works in most cases.

It is a tried and true formula! 

I hope that makes sense.You can look through similar recently-sold properties and calculate the prevailing Capitalization Rates in your area to get an idea for what to plug in as your anticipated Capitalization Rate for the purposes of the formula above.