Calculator Panel
Calculation Ready
Enter your values above and click Calculate.
What This Calculator Does
This calculator performs a thorough profitability analysis of a fix-and-flip project, evaluating costs, net margins, and investment returns.
How to Use This Calculator
Enter the purchase price, buying costs, rehab budget, holding costs, expected selling price, and selling costs, then click Calculate.
How the Calculation Works
The underlying math engine processes your inputs using exact formulas. This systematic approach ensures professional, institutional-grade calculation precision:
Mathematical Formula
Formula Legend:
- · Total Costs = Sum of all acquisition, renovation, holding, and transaction expenses.
- · Out of Pocket = The actual cash spent (usually cash purchase or down payment + rehab + fees).
- · Net Profit = Clean resale profit after all expenses.
Practical Example
Suppose you buy a fixer-upper for $180,000, paying $5,000 in buying closing costs. Your rehab budget is $45,000, holding costs (interest, insurance, utilities) sum to $6,000, you sell it for $295,000, and selling agent fees sum to $18,000:
Step-by-Step Mathematical Walkthrough:
- 1 Sum all costs: $180,000 (purchase) + $5,000 (buying) + $45,000 (rehab) + $6,000 (holding) + $18,000 (selling) = $254,000 total costs.
- 2 Calculate Net Profit: $295,000 - $254,000 = $41,000 profit.
- 3 Assuming you paid cash out of pocket for the flip ($254,000 total), your Return on Investment is ($41,000 / $254,000) * 100 = 16.14%.
Important Assumptions & Notes
- All rehabilitation expenses and transaction fees are fully captured.
- Holding costs are estimated over the entire duration of the flip.
Common Mistakes or Considerations
- Underestimating rehab and renovation costs, which typically run 15% to 20% over budget due to unexpected structural issues.
- Ignoring holding costs like mortgage interest, property taxes, insurance, and heating utilities during the renovation phase.
Frequently Asked Questions
What is the 70% rule in house flipping?
A rule of thumb stating you should not pay more than 70% of the After Repair Value (ARV) of a property, minus the estimated cost of repairs. For example, if ARV is $300,000 and repairs are $50,000, your maximum purchase price is ($300k * 0.70) - $50k = $160,000.
What are holding costs?
Holding costs are the ongoing expenses incurred while you own the property but are not renovating it: mortgage interest payments, property taxes, hazard insurance, heating/electrical utilities, and HOA fees.