How this calculator works
It adds up the four layers of cost on a flip (buying, rehab, holding and financing, then selling) and subtracts them from the sale price.
The 70% rule
A common screening rule: pay no more than 70% of the after-repair value, minus the repair budget. The other 30% is meant to cover holding, financing and selling costs and still leave a profit.
On a $375,000 ARV with a $55,000 rehab, that is $262,500 − $55,000 = $207,500. In expensive markets or on cheap houses the rule can be too loose or too strict, which is why this calculator also works out the max offer from your actual costs.
Max offer for your target profit
The highest purchase price that still leaves your target profit after every cost you entered, with the loan amount held the same. It moves dollar for dollar with the price.
Break-even sale price
The sale price at which you walk away with nothing. The wider the gap between this and your ARV, the more room you have if the market softens or the house sits.
What this does not model
It charges interest on the full loan for the whole hold. If your lender releases rehab money in draws, your real interest will be a little lower. It also leaves out income taxes on the profit, which for most flippers are taxed as ordinary income, and any lender fees beyond points.
Frequently asked questions
What is the 70% rule in house flipping?
A rule of thumb that says your purchase price should be no more than 70% of the after-repair value minus the cost of repairs. It is a quick screen for whether there is enough room for costs and profit, not a guarantee. Many investors adjust the percentage up or down for their market.
What profit should a house flip make?
Many flippers aim for a profit of at least 10% to 20% of the sale price, or a fixed dollar minimum that makes the risk and work worthwhile. Thin margins leave no room for a rehab overrun or a price cut.
What costs do new flippers forget?
Loan points, the interest and utilities that keep running while the house is listed, agent commissions, seller closing costs and transfer taxes, and a contingency for problems found behind the walls. Together these often take 15% or more of the sale price.
How do hard money loans affect a flip?
Hard money lenders typically charge interest-only payments at higher rates than a regular mortgage, plus points up front. They let you buy with less cash, which raises your return on cash, but every extra month of holding costs more.
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Results are estimates based on the numbers you enter and simplified assumptions. They are not financial, tax, lending or legal advice. Confirm figures with your lender, accountant, attorney or the relevant county before you commit money.