House Flip Profit Calculator
Calculate potential profit from flipping a house including purchase price, renovation costs, and selling expenses.
House flipping involves buying a property, renovating it, and selling it for a profit. The key to success is accurately estimating all costs before purchasing.
Basic profit formula:
Profit = After Repair Value - Purchase Price - Renovation Costs - Holding Costs - Selling Costs
Cost breakdown:
- Purchase price: What you pay for the property.
- Renovation costs: Materials, labor, permits, and unexpected repairs. Budget 10-20% extra for surprises.
- Holding costs: Monthly expenses while you own the property including mortgage payments, insurance, property taxes, and utilities. A typical flip takes 3-6 months.
- Selling costs: Agent commissions (5-6% of sale price), closing costs (1-3%), staging, and marketing.
The 70% Rule: Many experienced flippers use this guideline.
Never pay more than 70% of the After Repair Value (ARV) minus renovation costs.
Max Purchase Price = (ARV x 0.70) - Renovation Costs
Return on Investment (ROI):
ROI = (Profit / Total Investment) x 100
A good flip typically targets 10-20% ROI. Anything below 10% may not justify the risk and effort involved.
Be conservative with your ARV estimate. Research comparable recent sales in the same neighborhood.