I keep running the math on a 2-bed cape in West Roxbury, asking 489k, ARV probably 615k if I do the kitchen and both baths right. At 70 percent of 615 minus maybe 55k in scope, my max offer is 375k. That's 114k below ask. Nobody is taking that offer.
Yeah 70% falls apart fast once ARVs clear 550 in that market. I'm passively in a project near Roslindale and the partners ended up closer to 78 to 80% just to get the deal done, and it still penciled with tighter margins. The rule is more of a starting ceiling than an actual offer number up here.
The 70% rule was basically built around Midwest and Southeast price points where you are flipping $150k to $250k homes and your profit margin is maybe $30k to $40k if everything goes right. When ARVs hit the $600k range your carrying costs, financing, agent fees, and transfer taxes on both ends eat a much bigger absolute dollar figure even if the percentages look similar, so the formula starts under-protecting you in some ways and over-restricting you in others at the same time.
What I have found working closer to that price band is that the real constraint is not a fixed percentage, it is your lender's terms and your actual exit confidence. I have passed on deals where the math worked at 72% or 73% because I was not sure the ARV held, and I have gone to 75% on one where I had a tight comp within 90 days and a contractor already scoped. On your West Roxbury cape specifically, that $615k ARV is doing a lot of heavy lifting. If the kitchen and baths push to $70k instead of $55k, which in Boston metro they often do once you are actually in the walls, your margin compresses fast. The ask being $489k is not your real problem. Your real problem is whether $615k is defensible when finished product in that pocket is selling in the $590k to $620k range depending on the week.
