I see listings all the time using that formula, especially here in the Marketplace. 

I would use the market value to use the 70% formula.

If you're going to purchase a property to fix up and resell, some people use this formula as a Guide: ARV minus 30%, minus all repairs.

In addition to what Wayne says above, there are other formulas to determine maximum offer price -- a percentage of resale value is just one formula and not one that everyone uses (for example, I don't use a percentage).

Get a firm grasp on verbiage and calculating the standard formulas before a temping to make an offer on a property if it is a commercial deal (5+). 

Flip2freedom episode 77http://www.flip2freedom.com/a-3-step-formula-to-a-... - LISTEN TO THIS TODAY!

I just know, from experience, that motivated sellers exist outside the out-of-state, NOO, 3BDR, owned ten years formula.

One thing I have noticed is that there seems to be a formula for those of us looking to pursue the buy & hold niche to determine if a property will have a positive cash flow.

So, for a fix-and-flip, I would start with this formula:65% of the ARVminus repair costsminus holding costsminus closing costsminus your expected profitgives your MAO - Maximum Allowable Offer.There is some debate about the 65% - some folks only go down to 70%, others take even less discount and it will depend on how competitive the market is.

If there is no proven formula, then I'll create my own.