How to Use the House Flipping Profit
Flipping houses is a numbers game — the margin between what you pay, what you spend renovating, and what the house actually sells for can be razor thin once financing costs and agent commissions eat into your proceeds. This calculator gives you net profit, ROI, and the classic 70% Rule max offer so you know your walk-away price before you bid.
Step-by-Step Guide
- 1
Enter the purchase price of the property.
- 2
Enter the After Repair Value (ARV) — what the home will sell for once renovated, based on comps.
- 3
Add your renovation budget — get contractor quotes, then add a 10–15% contingency.
- 4
Add closing costs on the purchase.
- 5
Enter monthly holding costs — loan interest, taxes, insurance, utilities during the renovation.
- 6
Enter your expected holding period in months.
- 7
Set selling costs % — typically 6–10% for agent commission and closing costs.
- 8
Compare your numbers to the 70% Rule max offer to sanity-check the deal.
House Flipping Profit Formula
Total Investment = Purchase Price + Renovation Cost + Buy Closing Costs + Holding Costs Net Proceeds = ARV − Selling Costs Net Profit = Net Proceeds − Total Investment 70% Rule Max Offer = (ARV × 70%) − Renovation Cost
Worked Example
Purchase: $180,000. ARV: $300,000. Renovation: $45,000. Buy closing: $3,600. Holding: $1,200 × 4 = $4,800. Selling costs: 8%. Total Investment = $180,000 + $45,000 + $3,600 + $4,800 = $233,400 Selling Costs = 8% × $300,000 = $24,000 Net Proceeds = $300,000 − $24,000 = $276,000 Net Profit = $276,000 − $233,400 = $42,600 ROI = $42,600 ÷ $233,400 = 18.3%
Understanding your result
Calculator results depend entirely on the information entered. For the most useful estimate, use current and accurate figures and include all costs that apply to your specific situation.
Frequently Asked Questions
What is the 70% Rule in house flipping?
The 70% Rule says you shouldn't pay more than 70% of the ARV minus renovation costs. It builds in a margin for holding costs, selling costs, and profit, and is a fast sanity check before deep-diving into a deal.
What is a good ROI for a house flip?
Many flippers target 15–20%+ ROI (or a flat profit of $20,000–$30,000+ per deal) to account for the time, risk, and capital tied up. Deals below 10% ROI often aren't worth the effort and risk of a renovation gone wrong.
What holding costs should I include in a flip?
Hard money or bridge loan interest, property taxes, insurance, utilities, and any HOA dues during the renovation and marketing period. Underestimating the timeline is the #1 way flippers blow their budget.
How accurate does my ARV estimate need to be?
Very. Pull at least 3–5 closed comparable sales within the last 6 months and a similar radius, adjusted for square footage and condition. An inflated ARV is the most common cause of a flip losing money.
Should I include my own labor in renovation costs?
If you're doing work yourself, still price it at market labor rates to know your true profit — otherwise you're paying yourself in unpaid hours instead of real ROI.