Where does the 70% MAO comes from?


Good evening.
I am a real estate investor. As of now,i am trying to wholesale. Success is on the way. I know it.
My question is to know why do buyers request properties at 70% ARV?
What is the logic behind it?
I appreciate your clarifications.


Most investors expect to net as much as 20%, assuming it takes 10% to rehabilitate and close(brokerage)…
Assuming home is worth 200K(ARV) and they buy it from wholeseller at 140K. There is just 60K potential profit before anything. Making <10% net is not worth the time and trouble. Most people use loans to finance their project and interest rate is often stellar.


It is all tied up to the point and fees HMLs charge borrowers,who are already in the hole before even starting the operation.