Fix and Flip Calculator

How to read this result

The headline is profit: the after-repair value minus every cost of the project. On the default example — $210,000 purchase, $55,000 rehab, $340,000 sale — profit is $28,200, which is a 10.17% return on the $277,200 of cash invested and 20.35% annualised over a six-month hold.

The breakdown is where the number is explainable: total cost, the cash invested before selling, selling costs, holding costs and the break-even ARV. If profit looks better than you expected, one of those rows is usually smaller than it should be.

Profit is not the markup on the house

A flip that buys at $210,000 and sells at $340,000 looks like a $130,000 spread. It is not. The spread has to absorb the renovation, both sets of closing costs, the months of carrying the property, the financing, and the commission at sale:

The selling costs alone are larger than the profit. That is typical of residential flips: the exit is expensive, and a project that only works because the commission is ignored does not work.

How the two returns are calculated

ROI = Profit ÷ (Purchase price + Purchase closing + Rehab + Financing costs)
Annualised ROI = ROI × 12 ÷ Holding months

The denominator is cash invested before selling, which is why it excludes holding costs and selling costs: those are paid out of the project rather than committed at the start. The consequence is that ROI here is slightly more generous than a return on every dollar that eventually leaves your account. The total-cost line shows the full picture, and the two together are the honest reading.

Annualised ROI is a simple extrapolation. Doubling a six-month return to a twelve-month figure assumes the capital is redeployed immediately at the same rate, which is rarely true. Use it to compare projects of different durations, not as a forecast.

The ARV decides the deal

Every other input is a cost you control or a number you can quote. The ARV is an estimate of what a buyer will pay after the work is done, and it moves the result faster than anything else. The table below holds all costs fixed and changes only the sale price.

A $20,000 miss on the ARV swings profit by about $18,600, because selling costs fall slightly with the lower price. That is the risk a flip carries: the largest input is the one you do not control until the property sells.

The holding period is a cost, not a detail

Every month the property is owned costs the monthly holding figure, and the return is spread over more months. Both effects work against a slow project:

Three extra months cut annualised ROI roughly in half, from 20.35% to 10.97%, even though the project remains profitable. That is why a contractor schedule and a realistic permit timeline belong in the analysis before the offer, not after the closing.

A rehab overrun is a margin problem

On this project the profit margin is 8.29% of the sale price. Construction overruns come straight out of that margin, and there is not much of it:

A $20,000 overrun — roughly a third of the original construction budget — removes about 70% of the profit. That is the argument for a contingency line in the rehab budget and for pricing the purchase with the contingency already included, rather than assuming the estimate holds.

How short-term financing changes the numbers

Most flips are financed with a short-term loan rather than cash. Hard-money and private lenders typically charge points at closing and interest that accrues monthly, size the loan against the purchase and the rehab, and may release the rehab money in draws as work is completed.

This calculator takes financing as a single total, which is a simplification. A real quote usually separates origination points, the interest rate and other fees, and the interest grows with the length of the project. That is why a lender will ask for a scope of work, comparable sales for the ARV and an exit plan before funding: the loan is underwritten against the project, not just the property.

Draw schedules also change the cash requirement. If the rehab money arrives in stages, the borrower funds the first stage and is reimbursed after an inspection, so the cash needed at closing can be higher than the down payment suggests. Adding a financing line that reflects the quote, rather than a round number, keeps the profit figure honest.

Break-even ARV

The break-even ARV is the sale price at which profit is exactly zero: every cost before selling, divided by one minus the selling-cost percentage. On the default project it is $309,677. The property can sell for $30,323 less than the ARV and still not lose money — a more useful cushion than a percentage return, because it is expressed in the same units as the comps you are using to estimate value.

It also makes the 70% rule easier to interpret. The rule is a screening heuristic; the break-even ARV is the actual threshold for this cost structure. They answer related questions, but only one of them accounts for your holding period, financing and selling costs.

On a live project, compare the break-even figure with the range of comparable sales rather than a single point estimate. When the break-even sits near the middle of that range, a soft appraisal or a slower sale removes most of the margin.

What this calculator does not include

• Tax. Income tax on the gain, capital gains treatment and any depreciation recapture are outside the arithmetic.
• Change orders and overruns. The rehab budget is a single number. A contingency of 10–15% is common practice and is not built in.
• Timeline risk. Holding months are an input, not a schedule. Every extra month adds the monthly holding cost and delays the return of capital.
• Financing structure. Financing is a single total, not a schedule of draws, points and interest. A hard-money quote with a draw schedule is more precise.
• Your own labour. The calculation is cash-based. Sweat equity improves the cash return without appearing anywhere in it.

Comparing a flip with a hold

A flip converts the property into cash once. A hold keeps it and produces income, which is where the BRRRR calculator and the cash-on-cash calculator apply. The two exits are not directly comparable on ROI alone: one ends the investment, the other keeps capital deployed and adds debt paydown and appreciation to the result.