Holding Costs
Includes mortgage, insurance, taxes, utilities, and loan interest.
Closing Costs
Sell costs typically include 5-6% agent commissions plus 2-3% in title, transfer taxes, and fees.
Flip Analysis
Enter property details and click calculate.
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Introduction
ATTOM Data reports that the average gross flipping profit in the U.S. exceeded $67,000 per transaction in 2024, yet net margins after all costs often fall below 10 percent. The spread between a promising ARV and actual take-home profit is where most inexperienced flippers lose money. Rehab overruns, holding cost underestimates, and agent commissions erode margins fast. According to the National Association of Realtors, selling costs alone (commissions, transfer taxes, attorney fees) typically represent 7 to 10 percent of the sale price. A $350,000 ARV property with $30,000 in selling costs and $45,000 in rehab leaves far less margin than the raw ARV number implies. This calculator runs the complete numbers so you know your actual profit before you make an offer.
What This Calculator Does
This fix and flip profit calculator computes net profit, return on investment, and profit margin for house flipping projects. Enter the purchase price, estimated rehab costs, after-repair value, holding costs (monthly carrying costs and holding period), purchase closing costs, selling closing costs, and financing costs. The calculator returns gross profit, total project costs, net profit after all expenses, ROI as a percentage of total investment, annualized ROI, and the maximum allowable offer (MAO) based on your target profit margin using the 70 percent rule and your custom target margin.
The Formula
ARV (After Repair Value) is the estimated market value of the property after all renovations are complete. Subtracting purchase price, rehab costs, and all transaction and carrying costs gives gross net profit. ROI is Net Profit divided by total cash invested (purchase price plus rehab plus closing costs plus financing costs), expressed as a percentage. Annualized ROI adjusts the ROI for the holding period to make deals of different durations comparable. The 70% rule (MAO = ARV x 0.70 - Rehab Costs) is a quick heuristic, but this calculator replaces it with your actual cost inputs for a more accurate maximum offer.
Step-by-Step Example
Enter purchase price and rehab estimate
Example: Purchase price $185,000, estimated rehab $55,000. Get at least two contractor bids. Add a 10 to 15 percent contingency buffer to your rehab estimate for unforeseen issues (foundation, electrical, plumbing surprises are common).
Estimate holding costs and timeline
Monthly holding costs include mortgage payment or hard money interest, property taxes, insurance, utilities, and HOA if applicable. Example: $2,800/month x 6 months = $16,800. Be conservative on timeline; 6 months is typical for a $55,000 rehab, 3 months for light cosmetic work.
Add all closing costs
Purchase closing costs: 1 to 3% of purchase price. Example: $185,000 x 2% = $3,700. Selling closing costs: agent commissions (5 to 6%) plus transfer taxes, title, attorney fees. Example: $350,000 x 8% = $28,000 total selling costs.
Calculate and evaluate the deal
Total costs: $185,000 + $55,000 + $16,800 + $3,700 + $28,000 = $288,500. Net profit: $350,000 - $288,500 = $61,500. ROI: $61,500 / $288,500 = 21.3%. Annualized (6-month hold): 42.7%. Assess whether this meets your minimum return threshold before making the offer.
Real-World Use Cases
Evaluating a Pre-Foreclosure Offer
An investor is considering a pre-foreclosure at $195,000 with a $72,000 rehab estimate and an ARV of $385,000. Running all costs through the calculator (8-month hold at $3,100/month, $4,200 purchase closing, $31,000 selling costs) produces a net profit of $58,000 and ROI of 20.4%. The investor's 20% minimum is just met, so they counter at $185,000 to improve the margin before committing.
Hard Money vs. Cash Purchase Comparison
Using hard money at 11% interest plus 2 points on a $210,000 purchase adds approximately $18,900 in financing costs over 7 months. The same deal purchased with cash saves those financing costs but ties up more capital. The calculator shows the cash deal yields 24% ROI on total investment vs. 21% for the financed deal, but the financed deal frees $210,000 for parallel deals.
Validating the 70 Percent Rule on a Specific Deal
The 70% rule suggests MAO = $350,000 x 0.70 - $55,000 = $190,000. Running actual costs into the calculator (with realistic holding costs and selling expenses) produces an MAO of $182,400 for a 15% target net margin. The rule overstated the safe purchase price by $7,600 because it did not account for higher-than-average selling costs in that market.
Comparison
| ARV | Purchase Price | Rehab | All Other Costs | Net Profit | ROI |
|---|---|---|---|---|---|
| $300,000 | $155,000 | $45,000 | $28,000 | $72,000 | 31.6% |
| $350,000 | $185,000 | $55,000 | $48,500 | $61,500 | 21.3% |
| $400,000 | $215,000 | $65,000 | $57,200 | $62,800 | 18.6% |
| $450,000 | $245,000 | $75,000 | $65,000 | $65,000 | 17.5% |
| $500,000 | $270,000 | $85,000 | $75,000 | $70,000 | 16.8% |
Common Mistakes to Avoid
Underestimating rehab costs. New flippers consistently underestimate by 20 to 40 percent. Structural issues, code compliance upgrades, and permit costs are rarely visible in a walkthrough. Always get a licensed inspector's report before finalizing your rehab budget, and add at least 10% contingency.
Ignoring holding costs. A deal that looks like 25% ROI on paper shrinks to 10% if the rehab takes 10 months instead of 5. Each extra month of hard money interest at 11% on a $200,000 loan costs approximately $1,833. Model conservative timelines, not optimistic ones.
Using optimistic ARV without comparable sales support. ARV must be based on sold comps (not listed properties) within 0.5 miles, same bedroom/bath count, within 10% square footage, sold within 90 days. Using asking prices or dissimilar comps inflates ARV and destroys the deal math.
Forgetting selling costs. A $350,000 sale with 6% agent commissions plus transfer taxes, title insurance, and attorney fees can total $28,000 to $35,000 in seller costs. Many beginners only model the commission and miss $7,000 to $10,000 in ancillary closing expenses.
Frequently Asked Questions
Accuracy and Disclaimer
This calculator provides estimates based on inputs you supply. Actual rehab costs, ARV, holding periods, and closing costs will vary. Real estate transactions involve legal, tax, and financial complexity that this tool does not capture. Consult a licensed real estate attorney, CPA, and experienced contractor before making purchase decisions. ARV estimates should be validated by a licensed appraiser or experienced real estate agent with access to current MLS comparable sales data.
Conclusion
A fix and flip deal lives or dies in the offer price. The maximum allowable offer is the number this calculator helps you defend. Once you have your project profit analysis, run the ROI Calculator to compare the annualized return against alternative investments. If you are evaluating whether to hold rather than flip, the Rental Property Cash Flow Calculator models the long-term income from converting the property to a rental instead.
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