House Flipping Calculator

House flipping math comes down to one question: did you buy it cheap enough? The 70% rule is the shorthand most flippers use to answer that before making an offer.

70% Rule Maximum Purchase Price = After Repair Value x 0.70 - Renovation Costs

If a house will be worth $300,000 fixed up and needs $50,000 in repairs, the most you should pay is $160,000. The 30% buffer covers selling costs, financing, holding costs, and profit. Paying more than the 70% rule allows is how flippers get squeezed.

The full profit calculation:

Net Profit = Sale Price - Purchase Price - Renovation Costs - Carrying Costs - Buying Closing Costs - Selling Closing Costs

Carrying costs are the monthly expenses while you own the property: loan interest, property taxes, insurance, and utilities. A $200,000 hard money loan at 12% costs about $2,000 per month just in interest. A six-month flip adds $12,000 in carry — a number beginners consistently underestimate.

Buying closing costs typically run 1-3% of the purchase price. Selling closing costs — agent commissions plus transfer taxes — typically run 6-8% of the sale price. That 8% haircut on a $300,000 sale is $24,000, gone before you see a dollar.

Return on investment:

ROI = Net Profit / Total Cash Invested x 100

Total cash invested includes down payment, renovation draws, and carrying costs. Annualized ROI adjusts for how long the flip took: (1 + ROI)^(12 / months) - 1.

Most experienced flippers target a minimum $30,000 net profit and at least a 15% annualized ROI, or they pass on the deal.