Fix and Flip Profit Calculator
Estimates the net profit on a house flip by accounting for purchase price, renovation costs, selling costs, and holding costs over the project timeline. Use it before making an offer to ensure adequate margin.
About this calculator
Fix-and-flip profit is calculated by starting with the after-repair value (ARV) and subtracting every cost incurred from purchase to sale. The formula is: Profit = ARV × (1 − Selling Costs / 100) − Purchase Price − Renovation Costs − (Purchase Price × 0.08 × Holding Time / 12). The selling costs term (agent commissions, closing costs, transfer taxes) reduces the net sale proceeds. Holding costs are estimated at 8% of the purchase price per year—covering hard money loan interest, insurance, utilities, and property taxes—prorated for the number of months held. The 70% rule of thumb suggests your maximum offer should be no more than 70% of ARV minus renovation costs, and this calculator lets you stress-test that logic with your actual numbers.
How to use
A home has an ARV of $350,000. Purchase price is $180,000, renovation costs are $45,000, holding time is 6 months, and selling costs are 8%. Step 1: Net sale proceeds = $350,000 × (1 − 0.08) = $322,000. Step 2: Holding costs = $180,000 × 0.08 × (6 / 12) = $7,200. Step 3: Profit = $322,000 − $180,000 − $45,000 − $7,200 = $89,800. This represents the estimated gross profit before income taxes on the flip.
Frequently asked questions
What selling costs should I include when calculating fix and flip profit?
Selling costs typically include real estate agent commissions (5–6%), title insurance, transfer taxes, closing attorney fees, and any seller concessions. Combined, these commonly total 8–10% of the sale price. Using a conservative 8–9% estimate in your analysis helps protect profit margin from being eroded by unexpected closing costs. Failing to account for all selling costs is one of the most frequent reasons flippers earn less than projected.
How does holding time affect the profitability of a house flip?
Every additional month a property is held increases carrying costs—hard money interest, insurance, utilities, and taxes all accumulate. At an 8% annual holding cost rate, a $200,000 purchase costs roughly $1,333 per month to hold. A project that runs three months over schedule can easily consume $4,000+ in unplanned costs, shrinking or eliminating profit. Experienced flippers budget for delays and factor in at least one to two extra months of holding time when underwriting a deal.
What is the 70% rule in house flipping and how does it relate to ARV?
The 70% rule states that a flipper should pay no more than 70% of the ARV minus renovation costs for a property. For a $300,000 ARV home needing $40,000 in repairs, the maximum offer would be ($300,000 × 0.70) − $40,000 = $170,000. The 30% buffer is intended to cover selling costs, holding costs, and profit margin. While the rule is a useful quick filter, this calculator replaces it with a detailed line-item analysis that accounts for your specific cost structure.