House Flipping Profit Calculator

House flipping involves purchasing a property, renovating it, and selling it for a profit. While it can be lucrative, successful house flipping requires careful planning, accurate cost estimation, and market knowledge.

Key Factors in Profitable House Flips

The 70% Rule

The 70% rule is a guideline used by many house flippers to determine the maximum purchase price for a property:

The 70% rule helps ensure you have enough margin to cover holding costs, selling expenses, and profit.

Understanding All Costs

Many novice flippers underestimate the total costs involved. Beyond the purchase price and renovation costs, be sure to account for:

• Closing costs – Both when buying and selling (typically 1-3% each)
• Holding costs – Mortgage/loan payments, property taxes, insurance, utilities
• Selling expenses – Real estate commissions (5-6%), staging, marketing
• Contingency budget – Always set aside 10-20% of renovation costs for unexpected issues

Financing Options

Different financing methods have varying impacts on your profitability:

• Cash – Eliminates interest costs but ties up capital
• Conventional loans – Lower interest rates but may be harder to qualify for with investment properties
• Hard money loans – Easier to obtain for investment properties but with higher interest rates (10-15%) and often points (2-5% of loan amount)

Timeline Considerations

Time is a critical factor in house flipping profitability:

• Each additional month increases holding costs
• Typical timelines: 1-3 months for renovation, 1-3 months for selling
• Delays in permitting, contractor availability, or market conditions can extend your timeline

Calculating Return on Investment (ROI)

There are several ways to calculate ROI for a house flip:

Simple ROI

Annualized ROI

Cash-on-Cash Return

Common Pitfalls to Avoid

• Overestimating ARV – Research comparable sales thoroughly and be conservative
• Underestimating renovation costs – Get multiple contractor bids and include a contingency budget
• Ignoring carrying costs – Each month of ownership adds to your expenses
• Overlooking market conditions – A changing market can impact your selling price and timeline
• Renovating beyond neighborhood standards – Don't create the most expensive house on the block

Using Our House Flipping Profit Calculator

Our calculator helps you:

• Account for all relevant costs in a house flipping project
• Calculate potential profit and various ROI metrics
• Visualize the breakdown of costs and profit
• Analyze the viability of your deal using established industry metrics

Use it to evaluate potential deals, compare different scenarios, and make data-driven investment decisions. Remember to input realistic estimates based on thorough research and professional input.