That may be the formula that wholesalers are telling you to use but put yourself in the shoes of the seller. Let's say he has an appraisal or a CMA from a realtor telling him that his house is valued at $200,000. It needs a few repairs, but "as is" it is worth $200,000.
Now you come along with your formula. You look at the property and determine that $20,000 worth of repairs will bring a resale price of $250,000.
You apply your handy little formula: $250,000 x .65 - $20,000 =$142,500.
Now ask yourself, "If that was your personal home, would you sell it for $142,000 knowing that it is worth $200,000?" No one in their right mind would throw away almost 30% of the value - that would represent their equity.
Maybe that formula worked back in 2009 when you could get foreclosures for pennies on the dollar - but it does not work in this market. You need to step back into the real world and create a formula that will earn you between $2,000 - $5,000 on the deal and then work with those numbers.