House Flip Calculator
Quick answer
Pre-tax profit ≈ ARV − (purchase + closing + rehab + holding + sell-side). If you need top-of-range ARV, minimum rehab, and a buyer in week one to clear your minimum, you are not running a margin—you are speculating.
For a related estimate, see Cap Rate Calculator.
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What counts in “all-in”
All-in = purchase + acquisition closing + rehab + holding costs (interest, insurance, utilities, security, HOA during rehab) + selling costs (commission, staging, transfer taxes, seller credits). Excluded: your time, opportunity cost of capital elsewhere, and income taxes on gain—those are real but sit outside a simple spread sheet.
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A flip is a short-duration trade: you are buying basis and a construction plan, then selling liquidity and timing risk. Spread is what is left after you pay for the asset, the work, the months you hold, and the friction to exit—not “ARV minus purchase.” For hold analysis, rental NOI; for bridge carry, P&I against real months, not wishful schedules.
How to use this calculator
- Underwrite ARV like a lender would: Closed comps, same beds/baths/finish—not asking price. If your resale depends on a market that is 10% hotter in six months, write that down as risk, not upside.
- Put contingency on rehab: Hidden plumbing, code upgrades, and permit delays are the norm—10–20% contingency on moderate rehabs is a starting point, not pessimism.
- Load full exit costs: Commission, transfer taxes, staging, and seller concessions come out of the same check as your profit—model them before you bid.
Common mistake: ARV as a wish
The market pays what similar homes just closed for—not what you need. If break-even ARV sits above that band, the error is almost always in purchase or rehab, not the eventual buyer.
Real-world examples
- Case study: $265k purchase, $58k rehab, $415k ARV: All-in basis $323k before carry. Sell-side 7.5% + $4k in fees → ~$35k exit load. Four months carry at $1,400/mo → $5,600. Net ≈ $415k − $323k − $35k − $5.6k ≈ $51.4k pre-tax before misc. A $7k overrun and 60 extra days on market (~$4.5k carry + a $5k price cut) can erase ~30% of that margin—tight deals need slack.
- Sensitivity check: Rerun with the return assumption 1-2 points lower and the time horizon a few years shorter. If the outcome still works, the plan has margin; if it collapses, the plan depends on optimistic assumptions holding.
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What to decide
Experienced operators often want enough spread to survive a five-figure rehab surprise and a quarter longer on market. If you cannot name where that cushion lives in dollars, you are underwriting a timeline that has never slipped—which it will. Compare to rental yield when the spread is thin: sometimes holding beats a skinny flip.
FAQ
What margin should I target on a flip?
Many experienced operators want enough spread to survive a $10k–$25k overrun and 60–90 extra days on market—if your profit only exists on a perfect timeline, you do not have margin, you have hope.
Is ARV the same as list price?
No. ARV should come from closed comps similar in beds, baths, and finish level—list price is asking; comps are evidence.
Do I include realtor fees in profit?
Yes—seller-side commission and transfer taxes are real exit costs. Omit them and you overstate profit before you list.
How long should I budget for holding costs?
Add months past your best-case rehab—permits, weather, and buyer financing blowouts happen. Carrying costs do not pause when the schedule slips.
When is a flip worse than renting?
When the spread between purchase+rehab and rentable value is thin—sometimes better cash-on-cash comes from holding and leasing; flips optimize a one-time exit, not long-run yield.