House Flip Calculator

How to calculate house-flipping profit

Flip profit is what's left after every cost of buying, fixing, holding, and selling a property is subtracted from what it actually sells for: Net Profit = ARV − Purchase Price − Total Expenses, where Total Expenses covers closing costs, the rehab budget, holding costs (taxes, insurance, HOA while you own it), financing costs (hard money points and interest), and selling costs (agent commissions and closing costs on the sale).

After Repair Value (ARV)

ARV is what the property is expected to sell for once renovations are complete — normally estimated from recent, comparable sales ("comps") of similarly renovated properties nearby. Every other number in a flip analysis is downstream of getting this one right: overestimate ARV and a deal that looks profitable can lose money; underestimate it and you might pass on a good deal.

The 70% Rule

A quick screening formula many flippers use before running full numbers: Maximum Offer = (ARV × 0.70) − Repair Costs. It's not a precise profit calculation — it's a fast filter to rule out deals that are unlikely to leave enough margin for financing, holding, and selling costs plus actual profit. The full calculator above checks your purchase price against this automatically when you're on the Fix & Flip tab.

Worked example

A property purchased for $150,000, needing $40,000 in repairs, with an ARV of $260,000, financed with a 90% hard money loan at 12% interest and 2 points, held for 6 months. Financing costs (points plus 6 months of interest) run about $10,800. Add $3,000 in purchase closing costs (2%), roughly $1,500 in holding costs (taxes and insurance over 6 months), and $15,600 in selling costs (6% of ARV) — total expenses land around $70,900. Net profit: $260,000 − $150,000 − $70,900 = about $39,100, an ROI of roughly 17.7% on total capital deployed. Against the 70% Rule, the maximum offer here would be ($260,000 × 0.70) − $40,000 = $142,000 — this example's $150,000 purchase price is slightly over that line, which is exactly the kind of gap worth double-checking before making an offer.

Common house-flipping mistakes

• Underestimating rehab costs — get a real contractor estimate before relying on a rough guess, especially for anything involving the roof, foundation, or major systems.
• Ignoring holding costs on a longer-than-planned timeline — permit delays and contractor scheduling routinely push projects past the original estimate.
• Forgetting selling costs — agent commissions and closing costs typically run 6-10% of sale price and materially change the profit picture.
• Using an optimistic ARV instead of one grounded in actual recent comps for the specific neighborhood and finish level.

FAQ

Does the 70% Rule always apply?
No — it's a fast screening tool, not a guarantee of profitability. High-value markets, smaller rehabs, or all-cash deals can make sense above 70%, while thin-margin markets may need a stricter ceiling. Run the full numbers either way.

What if I'm not using hard money financing?
Set the hard money loan amount and rate to match whatever financing you're actually using — cash, a conventional loan, or a private lender — the formula works the same way.

How is this different from a BRRRR deal?
A flip assumes you sell the property; a BRRRR assumes you refinance and keep it as a rental. If you're not sure which one you're evaluating, try the BRRRR Calculator and compare.