House Flip Profit Calculator
Calculate house flip net profit from purchase price, renovation budget, holding costs, and selling expenses.
Returns ROI and after-repair value (ARV).
House flip profit calculation must account for every cost category: acquisition, renovation, holding, selling costs, and taxes. Ignoring any one of these can turn a seemingly profitable deal into a loss.
The Formula:
Net Profit = After Repair Value (ARV) − Purchase price − Renovation costs − Holding costs − Selling costs − Taxes
Cost Category Breakdown:
| Category | Typical Percentage of ARV |
|---|---|
| Purchase price (using 70% rule) | ≤ 70% of ARV |
| Renovation costs | 15–25% of ARV |
| Holding costs (6 months) | 3–5% of ARV |
| Selling costs | 6–8% of ARV |
| Target profit | 10–20% of ARV |
The 70% Rule:
Maximum purchase price = ARV × 70% − Renovation costs
Worked Example:
ARV (expected sale price): $350,000
Max purchase price = $350,000 × 70% − $55,000 renovation = $245,000 − $55,000 = $190,000
Holding costs (6 months): loan interest + insurance + taxes + utilities = $15,000
Selling costs: 6% agent commissions + 2% closing costs = $28,000
Net profit: $350,000 − $190,000 − $55,000 − $15,000 − $28,000 = $62,000
Return on investment: $62,000 / $190,000 = 32.6% (over 6 months)
Practical Tips:
- Always add 15–20% contingency to your renovation budget — surprises always happen
- Short-term capital gains (held under 1 year) are taxed as ordinary income in the US — plan for 25–37%
- The 70% rule is a starting point; adjust for your market, renovation risk, and required returns
- Partner with a licensed contractor for the first flip to avoid costly estimation errors