House Flip Calculator
A flip priced honestly: purchase, rehab, holding costs, financing and selling costs against the after-repair value — profit and ROI, with the famous 70% rule shown and labeled as a rule of thumb.
Every cost in, then the profit — and the famous rule, labeled
Flips fail on forgotten lines: holding costs that bleed monthly, financing that is not free, selling costs that take their percentage of the prettiest number. This calculator assembles all of them against the after-repair value before it dares print a profit.
Profit = ARV − purchase − rehab − holding − financing − selling costs
Example: buy $150,000, rehab $40,000, ARV $260,000, six months held at $1,200 a month, $6,000 financing, 8% selling costs ($20,800): total invested $224,000 — profit $36,000, ROI about 16%. The same deal at an ARV of $230,000 loses money; ARV accuracy is the whole craft.
The 70% rule — a rule of thumb, printed as one
Flipping folklore says: maximum offer = 70% of ARV − repairs. It bundles profit margin and the forgotten costs into one blunt discount. This page shows it because practitioners use it — labeled as the heuristic it is, next to the full arithmetic that should make the actual decision.
How this is calculated
Selling costs = ARV × your percentage. Holding = months × monthly cost. Total invested = purchase + rehab + holding + financing + selling costs; profit = ARV − total invested; ROI = profit ÷ total invested. The 70% rule output = ARV × 0.70 − rehab, displayed under its own label. Taxes on the gain (typically short-term) are excluded and material — budget them separately.
Frequently asked questions
Why 70%? Where does the number come from?
Practitioner tradition: the missing 30% is meant to absorb holding, financing and selling costs and leave the profit. It predates modern cost levels and fails silently in expensive markets — a screening shortcut, never an appraisal.
What is the most common flip-killing error?
An optimistic ARV set by the best renovated comp on the street, and a rehab budget set by hope. Both errors point the same way, which is why flips that 'worked on paper' cluster at auction.
How should I estimate holding costs?
Mortgage or hard-money interest, property tax, insurance (vacant-property rated), utilities and lawn/snow care, monthly. Six months is the median plan; price nine and be pleasantly surprised.
Are hard-money costs in 'financing'?
Yes — points and interest on the flip loan belong in the financing field at their total dollar cost over the hold, not as a rate. The APR arithmetic of such loans is its own horror story; the total is what the deal feels.
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