House Flip Calculator
Work out the profit on a fix-and-flip. Enter the purchase price, repairs, financing and expected sale price, and see the net profit, your return and how the deal compares with the 70 percent rule.
The numbers below are an example. Replace them with your own.
How to use the calculator
- Enter the purchase price and the after repair value, which is what you expect it to sell for when finished.
- Enter the repair budget and a contingency for surprises.
- Enter how many months you expect to hold it, and the monthly holding costs.
- If you borrow, enter the loan percentages, interest rate and points. If you pay cash, leave them at 0.
- Enter the selling costs as a percent of the sale price.
How the calculation works
- Repairs = repair budget × (1 + contingency).
- Loan = share of purchase price borrowed + share of repairs borrowed.
- Loan costs = points on the loan + interest for the months held (interest only).
- Holding costs = monthly costs × months.
- Selling costs = sale price × (commission + other selling costs).
- Total cost = price + buying costs + repairs + holding + loan costs + selling costs.
- Net profit = after repair value − total cost.
- Cash invested = everything paid before the sale, minus the loan.
- Return on cash = net profit ÷ cash invested.
The 70 percent rule
The maximum offer under the rule is the after repair value times 0.70, minus the repairs. Flippers use it as a fast filter. It leaves out financing, closing costs and holding costs, so a deal can pass it and still make little, or fail it and still work with cheap money or a short timeline. Treat it as a first check, and use the full profit figure to decide.
Worked example
Buy for $175,000, sell for $300,000 after $40,000 of repairs plus 10 percent contingency. Six months to finish and sell, $1,500 a month holding costs, 2 percent buying costs, an 80 percent purchase loan and 100 percent repair loan at 11 percent interest and 2 points, and 6.5 percent selling costs. These are example figures, not a forecast.
- Repairs with contingency: $44,000. Loan: $184,000.
- Loan costs: $3,680 points + $10,120 interest. Holding costs: $9,000.
- Selling costs: $19,500. Total cost: $264,800.
- Net profit before tax: $35,200, which is 11.7% of the sale price.
- Cash invested: $61,300. Return on cash: 57.4%.
- 70 percent rule maximum offer: $166,000. The price is $9,000 over it, so the quick rule flags this deal, even though the full numbers show a profit.
- Sale price needed to break even: $262,353.
Time and financing matter. With cash instead of loans, profit rises to $49,000, but you tie up $231,500 and the return on cash falls to 21.2%. If the job runs three months longer, profit falls to $25,640.
What this calculator leaves out
Income tax, permits, structural surprises, a falling market, and the value of your own time. Loan fees beyond points are not included, and the loan is treated as fully drawn from day one.
Questions
What is the 70 percent rule?
A rule of thumb for the most you should pay for a property: 70 percent of the after repair value, minus the repair costs. It builds in roughly a 30 percent cushion for costs and profit. It is a quick filter only, because it does not account for your actual financing, holding time or selling costs, which the full calculation does.
What is the after repair value?
The price the property should sell for once the work is finished. The usual way to estimate it is to look at recent sales of similar finished homes nearby. A calculator cannot do that for you, and it is the single most important number in the analysis, so be cautious with it.
How much contingency should I add?
It depends on the age and condition of the house and how well you know the work. Older houses and larger jobs hide more surprises. The example uses 10 percent only to show how it flows through the numbers. Ask contractors, and check what your own past projects overran by.
Why do holding time and interest matter so much?
Every extra month adds holding costs and loan interest while the sale price stays the same. In the example, three more months cuts profit sharply. Try changing the months in the calculator.
Does this include tax?
No. Profit is shown before income tax. Tax on a flip depends on where you live and your own situation, so get advice from an accountant.
What does the calculator leave out?
Permits, unexpected structural problems, price drops in the market, loan fees beyond points, and the value of your own time. The loan is treated as interest only and fully drawn for the whole period, which slightly overstates interest on loans that are paid out in stages.
Is this financial advice?
No. It applies standard formulas to the figures you enter. Check any deal with people who know your market, and with a lender and an accountant.