Fix & Flip Profit Calculator
Profit
$19,063
- Cash you put in
- $62,838
- Return on cash
- 30.3%
- Annualized
- 70%
- Margin on ARV
- 6.0%
70% rule: pay no more than 70% of ARV minus repairs, $174,000 here. Your price is $26,000 above it, which leaves little room for overruns.
Where the money goes
| Purchase | $200,000 |
|---|---|
| Rehab | $50,000 |
| Closing costs to buy | $4,000 |
| Holding costs (6 months) | $5,400 |
| Loan interest on $212,500 | $11,688 |
| Lender points | $4,250 |
| Selling costs | $25,600 |
| Total cost | $300,938 |
| Sale price (ARV) | $320,000 |
Every extra month adds $2,848 of holding and interest cost. Profit on a flip held under a year is taxed as ordinary income (and can be self-employment income for frequent flippers), which this does not deduct.
Estimate the profit on a house flip after purchase and closing costs, rehab, holding costs, hard-money interest and points, and selling costs, with your return on cash, the annualized return, and a check against the 70% rule.
Formula
Worked Example
Costs add up to $300,938, of which interest and points on the $212,500 loan are $15,938 and selling costs $25,600. The profit is only 6% of the sale price, and the price is $26,000 above the 70% rule's limit, so a modest overrun or a lower sale price would wipe it out.
Frequently Asked Questions
What is the 70% rule for house flipping?
Pay no more than 70% of the after-repair value minus the rehab cost: for a $320,000 ARV and $50,000 of work, $174,000. The 30% margin is meant to cover closing, holding, financing and selling costs and still leave a profit.
How is flipping profit taxed?
A property bought and sold within a year produces a short-term gain taxed as ordinary income. Investors who flip regularly may be treated as dealers, making the profit subject to self-employment tax as well, and they can't use 1031 exchanges for flips.
What costs do first-time flippers underestimate?
Holding time and selling costs. Every extra month adds taxes, insurance, utilities and loan interest, and agent commissions, transfer taxes and buyer concessions often total 6–10% of the sale price. A 10–20% contingency on the rehab budget is common.