Fix and Flip Calculator

The fix and flip formula

Fix and flip profit is the after-repair value minus every cost the project consumed: purchase price, rehab, buying closing costs, lender points, loan interest, holding costs and selling costs. Everything else on this page is a ratio built on that one subtraction, and every input in it is an estimate you can move.

The line items divide into three groups. Acquisition is the purchase price plus the buying closing costs, title, transfer taxes and lender fees. The renovation is the rehab budget plus everything it takes to carry the house while the work runs: holding costs like taxes, insurance and utilities, and the interest on the loan. The exit is the selling costs, usually an agent commission plus closing costs, quoted as a share of the sale price.

Two ratios put that subtraction in context. Profit margin is net profit divided by the sale price, the share of every dollar the house sells for that you keep. Cash-on-cash return is net profit divided by the cash the deal tied up, which is everything the loan did not cover. On a short hold, the second number is the one to compare against any other use of the same money, because a flip returns its capital in months, not years.

The screen that filters deals before any of this is the 70% rule: keep the whole project at or under 70% of the after-repair value. It is not a law, and plenty of flips close without it, but it is the reason a deal can absorb a soft appraisal and still pay. This calculator runs all of it live: net profit, cash-on-cash, margin, annualized return, the cash the deal ties up, and the 70% check.

Worked example: a typical flip

Take the deal preloaded in the calculator above: a $250,000 purchase, a $50,000 rehab, a $380,000 after-repair value, $3,500 in buying closing costs, and six months of hard money at 85% loan-to-cost, 11% interest and 2 points. Net profit comes to $25,975. Here is every line behind that number.

The purchase and the rehab together are the project cost: $300,000. At 85% loan-to-cost the lender funds $255,000 of it, which leaves $45,000 of the purchase and rehab for you to bring to closing. Two points on a $255,000 loan is $5,100, paid at the closing table, and it buys the loan rather than the house.

Interest runs on the whole $255,000 because hard money is interest-only: 11% a year is $28,050, so a month costs $2,337.50. Six months of that is $14,025. Holding costs add $800 a month for taxes, insurance and utilities, another $4,800. Add the $3,500 of buying closing costs and the project has consumed $327,425 before the house is listed.

The exit costs $26,600. Selling costs are quoted as a percentage of the sale price, so 7% of $380,000 is the agent commission plus closing costs on the way out. That takes the all-in cost to $354,025, and $380,000 minus $354,025 leaves the $25,975 of profit.

Now the ratios. The cash in the deal is the $45,000 the loan did not fund plus $3,500 of closing, $5,100 of points, $14,025 of interest and $4,800 of holding, so $72,425. Dividing the profit by that cash gives a 35.9% cash-on-cash return, and scaling that to a full year gives 71.7% annualized. Profit as a share of the sale price is 6.8%.

One honest note on this deal: the 70% rule fails it. The ceiling for a $380,000 after-repair value is $266,000, and the all-in cost is $354,025, so the card reads Fail even though the flip makes money. That gap is the risk in the deal, not a mistake in the math. A $25,975 profit on a purchase that leaves no cushion survives only if the appraisal, the rehab and the calendar all hold.

Worked example 2: a flip that failed

Run the same deal with one input changed: the finished house appraises and sells for $340,000 instead of $380,000. The $25,975 profit becomes an $11,225 loss. Nothing else about the project went wrong. The purchase price was negotiated, the rehab came in on budget, and the calendar held.

The arithmetic is unforgiving in both directions. A $40,000 lower sale price also trims the selling costs, because 7% of $340,000 is $23,800 rather than $26,600, so the all-in cost falls to $351,225. Take that off the $340,000 sale and the deal is $11,225 short. The $72,425 of cash in the deal is now a 15.5% negative return, and the annualized figure is a 31% loss.

Notice which number moved. Every cost in the deal was an estimate you negotiated or controlled, and every one of them landed where it was supposed to. The only input that changed was the after-repair value, which is the one number the market decides and the one number the whole deal is built on.

That is why serious flippers treat the ARV as a range rather than a figure. Run the comps, take the three closest sold comparables, and underwrite the deal at the lowest of the three. On this deal, underwriting at $340,000 would have shown the loss before the money moved, and the fix is visible in the numbers: buy at $215,000 instead of $250,000, or cut the rehab to $25,000, or find a house that appraises higher. One of those three has to give, and the earlier you know which, the cheaper it is.

The 70% rule for flips

The 70% rule says pay no more than 70% of the after-repair value, minus the rehab budget. On a $380,000 ARV with a $50,000 rehab, the ceiling is $380,000 times 70%, or $266,000, minus $50,000, so the maximum offer is $216,000. The $50,000 of cushion is what the deal has to absorb surprises.

That cushion pays for the three things that reliably go wrong. An appraisal comes in low and the sale price follows it. The rehab runs over on a discovery behind the drywall. The market softens while the house sits, and an extra two months of carry lands on the cost side. A deal bought at the ceiling survives one of those, not all three.

The rule has a stricter reading, and this calculator uses it. The classic form tests the purchase price alone against the ceiling. The all-in test puts every cost inside it: purchase, rehab, buying closing costs, lender points, interest, holding and selling costs. On the default deal the all-in cost is $354,025 against a $266,000 ceiling, which fails the strict test even though the purchase price is the only input that looks close.

Neither version is a law. A hot market with fast sales and expensive houses routinely pushes investors past 70%, and a flip financed with cheap private money can clear a real profit above the line. What the rule buys you is a margin for being wrong, so the useful question is not whether a deal passes but how far past the line it sits, and what one bad month of carrying cost does to the answer.

Case study: screening 5 flips

Screening is where a flipper's week actually goes. Five deals were run through the same 70% screen, maximum offer equals the after-repair value times 70% minus the rehab budget, and only two survived it. Here is the whole list, as it would come off a spreadsheet.

Deal one, a duplex asking $250,000 with a $380,000 ARV and $50,000 of work. The ceiling is $216,000, so the asking price is $34,000 over it, and the all-in cost lands far past the line. Dead.

Deal two, a ranch asking $168,000 with a $300,000 ARV and $45,000 of work. The ceiling is $165,000, so the offer is $3,000 over. Close enough to make an offer? Not on these numbers. Three thousand dollars is one appraisal miss, and the deal already expects to buy and renovate at the same time.

Deal three, a brick colonial asking $205,000 with a $420,000 ARV and $60,000 of work. The ceiling is $234,000, so the price is $29,000 under it. That is room for a soft appraisal, a four-week delay, or a rehab surprise, and it goes on the short list.

Deal four, a bank-owned three-bed asking $140,000 with a $260,000 ARV and $55,000 of work. The ceiling is $127,000, so it is $13,000 over. Bank-owned also means no repair credits and a firm timeline, which is exactly the wrong place to be short of cushion.

Deal five, a bungalow asking $190,000 with a $340,000 ARV and $40,000 of work. The ceiling is $198,000, so it clears by $8,000. Thin, but it clears, and the rehab is the smallest on the list. It goes on the short list with the colonial.

Two of five survived, and that is a normal week. The screen did not require an inspection, a contractor bid, or a single phone call. It took five arithmetic problems and it saved the expensive work for the deals that deserved it. For a rental exit, run a quick screen before the flip as well, which asks one line whether the rent could carry the house if the sale stalls.

Where the money goes

Every dollar in a flip lands in one of five buckets: acquisition, rehab, financing, holding and the exit. On the default deal those five add up to $354,025, and no single bucket can be skipped. Knowing which one is largest is what tells you where to negotiate.

Acquisition is the purchase price plus buying closing costs, which is where most of the money goes and the only bucket the market sets. On the default deal it is $253,500, or 72% of the all-in cost. That concentration is why the purchase price decides whether a flip works.

Rehab is the bucket with the most variance. A $50,000 budget that lands at $62,000 does not just cost $12,000, it also extends the holding period, which adds interest and carrying cost on top. Bid the work before you close, hold a contingency of 10 to 15% of the budget, and treat that contingency as spent from day one.

Financing is two line items, lender points and loan interest, and together they run $19,125 on the default deal. Hard money prices risk, so the rate reflects the loan-to-cost, the property condition and the exit you are underwriting. Paying two points to borrow for six months is cheaper than four points of closing costs on a loan you keep for years, which is why short-term money is priced the way it is.

The exit is the bucket first-time flippers forget, and it is why a $25,975 profit can feel smaller than expected. Selling costs are quoted as a percentage of the sale price, so 7% of $380,000 is $26,600, more than the points and the interest combined. It is deducted at closing, which means it hits the profit directly and shows up last.

Fix and flip vs BRRRR vs buy-and-hold

Flipping converts a rehab into cash at a sale, BRRRR converts it into a rental while handing the cash back through a refinance, and buy-and-hold keeps the property and the loan for years. Same renovation skills, three different paydays and three different tax shapes. The right choice depends on whether you want a lump sum or an income stream.

A flip is the cleanest exit. There is no tenant, no second loan to service and no seasoning clock, and the profit is realized in one closing. The trade is that every dollar of profit is taxable in the year you earn it, and a slow market turns carrying cost into a clock.

The same renovation produces a different result when flipping becomes a rental: the refinance pays off the short-term debt and returns the capital, so the profit arrives as equity and cash flow instead of as a check. Compare the two on the same house and the deciding question is whether you need the money now or the income later.

Buy-and-hold is the slowest of the three and the least sensitive to timing, because rent arrives whether or not the market cooperates. It is worth pricing the yield against the others: compare to the leverage-free yield that the same property would produce as a rental, and put it beside the flip profit on the same house. A flip pays once, at the closing, and a rental pays every month in between: when the exit is a hold instead the same house is judged on every year of rent plus one sale. Whichever number you are willing to underwrite with conservative inputs is the strategy to run.

The three strategies use the same renovation toward different exits. This table lines up what each one pays, what it demands up front, how the tax lands, and who it suits.

A flip pays once at sale; a BRRRR pays by returning your capital; a rental pays every month.

Three mistakes that kill flip profits

Three mistakes kill more flips than bad markets do: an optimistic after-repair value, a rehab that runs over, and selling costs left out of the underwriting. Each one is a number you control before closing, and each one is cheaper to fix on paper than in the deal.

An optimistic ARV is the most expensive because it sets the ceiling on everything else. On the default deal, a $20,000 miss on the sale price costs $18,600 of profit, not $20,000, because selling costs fall by 7% of the miss. That is the good version. The same miss also drops the 70% ceiling from $266,000 to $252,000, which turns a deal that was already past the line into one with no cushion at all.

A rehab overrun charges twice. Picture the default deal with a $10,000 overrun that also stretches the job by a month: the cost goes up by $10,000, the extra month of carrying adds $800 of holding plus $2,337.50 of interest, and the profit drops by roughly $13,138. The fix is not optimism, it is a contingency line in the budget that you spend first.

Forgetting selling costs is the quiet one, because they never appear on the purchase side of the worksheet. On a $380,000 sale, 7% is $26,600, which is more than the lender points and all six months of interest put together. Underwrite the exit first, before the rehab and the asking price, and the profit number you carry into negotiations is the one you will actually see.

How to source and finance a flip

Flips come from three sources: wholesalers, the MLS, and direct mail or door knocking. Wholesalers sell contracts at a markup, so the discount is already partly spent. The MLS is the most competitive and the fastest to search. Direct mail finds the properties nobody has listed yet, which is where the room is, and it takes months of repetition before it produces.

Wholesalers are worth building relationships with anyway. They bring deals that never hit the market, and a good one will tell you when a property is priced past your 70% ceiling instead of wasting your inspection money. Ask what they paid for the contract and what their assignment fee is, because a $15,000 assignment fee is $15,000 of profit that used to be yours.

On the financing side, three sources cover a flip. Hard money lends against the project cost, funds in days, and prices that speed with points and a higher rate than a long-term loan. Private money from an individual lender can be cheaper and more flexible, usually structured as a note with a fixed term. All cash removes the interest and the points entirely and wins the deal in a competitive bid, at the cost of tying up every dollar for the whole hold; the calculator above prices that trade in one click.

One decision shapes the financing more than the rate: what happens at the end. A sale clears the loan at closing, which is what hard money is built for. Size that loan before you buy the house if you plan to refinance instead of sell, because the rent has to satisfy the lender before the refinance can close.

Who uses a fix and flip calculator

Six kinds of investors run these numbers, and they want different things from the same six cards. What they share is the moment before money moves, when the deal is still free to walk away from. Here is who uses it and what each one is checking.

A first-time flipper is estimating risk before committing $50,000 or more of capital, usually their own savings. Their question is whether the profit survives a slow sale, so the cards that matter are cash in the deal and the 70% check. If those two numbers describe a deal with no cushion, the honest move is to keep looking.

An experienced flipper screens 10 to 20 deals a week and expects to pursue two. Speed is the point: enter four numbers, read the profit and the 70% check, and move on. The calculator is a filter, not an underwriting model, and the deals that clear the filter get the contractor bid and the comps.

A wholesaler runs a maximum allowable offer before making an offer to a seller. Maximum offer is the after-repair value times 70% minus the rehab, and the wholesaler needs it in seconds, on the phone, with the seller waiting. The assignment fee is the difference between that ceiling and the contract price.

A hard money lender checks a borrower deal against the same discipline it lends on. Lenders care about loan-to-cost, the exit value, and whether the borrower has enough cushion to finish the project when the first estimate is wrong. Running the borrower's numbers through the 70% check is the fastest way to see how much room the deal has.

A real estate agent helping an investor client evaluates listings the same way, and the calculator turns a listing price into a verdict in one pass. It also gives the agent something concrete to show a seller whose asking price is above what an investor can pay.

A contractor-investor prices their own labor into the deal. When the crew is yours, the rehab line is a cost and a margin at once, and the question shifts to whether the flip beats the same hours billed to someone else. Enter the market rate for the work rather than zero, and the profit figure tells you which is worth more.

Every metric this calculator shows

The dashboard answers six questions, and they are ordered the way a flipper asks them: what did it make, what did the money return, what share of the sale is profit, what is that per year, how much cash did it tie up, and does it clear the entry screen. Each one is worth a specific decision.

Net profit is the sale price minus every cost, and it is the first thing to read. Positive is necessary and not sufficient: the size of the profit relative to the cash it took to earn it is what makes a flip worth doing. On the default deal it is $25,975.

Cash-on-cash return divides that profit by the cash the deal tied up, and it is return on your committed cash rather than a return on the property. The default deal returns 35.9%, which is high because the loan carried most of the cost. Leverage lifts this ratio when the deal works and deepens the loss when it does not.

Profit margin is net profit as a share of the sale price, so 6.8% means the deal keeps about seven cents of every dollar the house sold for. It is the number that travels best between markets, because it does not care how the deal was financed. Under 5% is where a flip stops being worth the risk.

Annualized return scales cash-on-cash to a twelve-month year, so a six-month flip returning 35.9% reads as 71.7%. It is the only card that lets a quick flip be compared with a slow one or with any other investment on the same clock, and it falls as the holding period stretches.

Cash in deal is every dollar the project took: the part of the purchase and rehab the loan did not fund, plus buying closing costs, points, interest and holding costs. On the default deal that is $72,425, and it is the figure that has to earn the return. On an all-cash flip it is the whole project, which is why all-cash deals show a lower cash-on-cash and a much lower risk of a forced exit.

The 70% rule check compares the all-in cost to 70% of the after-repair value and prints the maximum offer beside the actual purchase price. Pass means the deal has a cushion. Fail does not mean the flip loses money, it means the profit depends on the appraisal, the rehab and the calendar all holding.

How to use this calculator in 5 steps

Enter the four deal numbers first: purchase price, rehab budget, after-repair value and buying closing costs. These are the inputs the market and the property set. Every card updates as you type, and the placeholder in each empty field is the number the math is using, so a half-filled sheet still answers.

Set the financing and the calendar second. Choose hard money, conventional or all cash; picking all cash hides the loan fields and prices the deal without any financing cost. Then set the holding period and the monthly cost of carrying the house, which together drive the interest line more than the rate does.

Read net profit and the 70% check together rather than separately. A deal can make money and still fail the screen, and that combination is the most common one in a rising market. The pair tells you what the deal pays and how much room it has to be wrong.

Switch financing types on the same inputs to compare paths. All cash shows the profit without points or interest and the full project cost as cash in the deal; hard money shows a smaller cash commitment and a lower profit. The cost table under the chart prints both columns side by side, line by line.

Save up to three deals to compare them without re-entering numbers, then copy the link to keep or share the exact inputs. Saved flips live in your browser only, and the compare table puts them beside the deal you are typing across all six metrics.