Fix and Flip Profit Calculator: Estimate Your Next Deal Accurately

House flipping looks simple on TV. Buy low, renovate, sell high. Reality involves math, and most failed flips come from underestimating costs. This guide walks through the fix-and-flip profit formula and shows how to use a calculator to avoid losing money.

The 70% Rule

Experienced flippers use the 70% rule: never pay more than 70% of the after-repair value (ARV) minus repair costs.

Maximum Offer = (ARV x 0.70) - Repair Costs

This leaves room for profit, unexpected costs, and market shifts.

Cost Categories

1. Purchase price - Including closing costs, inspection, and appraisal.
2. Repair costs - Materials, labor, permits, and contingency (add 15-20%).
3. Holding costs - Loan interest, utilities, insurance, property taxes, and lawn care during renovation.
4. Selling costs - Agent commission (5-6%), closing costs, staging, and concessions.

Example Deal

• ARV: $400,000
• Repairs: $50,000
• Maximum offer: ($400,000 x 0.70) - $50,000 = $230,000

If you buy at $230,000, spend $50,000 on repairs, and hold for 6 months:

• Purchase + closing: $235,000
• Repairs: $50,000
• Holding costs: $8,000
• Total investment: $293,000
• Selling costs (6%): $24,000
• Net sale proceeds: $376,000
• Profit: $83,000

Using Our Calculator

Our fix-and-flip calculator handles the entire formula. Input ARV, purchase price, repair estimate, holding costs, and selling cost percentage. It outputs total investment, net profit, and ROI.

Common Mistakes

• Underestimating repairs: Always get contractor bids, not guesses.
• Ignoring holding time: Every month costs money.
• Overestimating ARV: Use sold comps, not listing prices.
• Skipping contingency: Budget 15% extra for surprises behind walls.

When to Walk Away

If the calculator shows less than 15% ROI, the deal is probably not worth the risk. Your time, capital, and credit are better deployed elsewhere.

Use our calculator before you make an offer. The numbers should excite you, not scare you.