Fix and Flip Profit Calculator Guide
Guessing at flip profits = overruns, lost money, failed flips. Accurate profit calculation = realistic expectations, successful flips, predictable returns. Here's how to calculate fix and flip profit correctly.
Fix and Flip Profit Formula
ARV (After Repair Value)
- Purchase Price
- Rehab Costs
- Holding Costs
- Selling Costs
= Net Profit
The 5 Components of Flip Profit
1. ARV (After Repair Value)
What the property will sell for after renovations
How to Estimate ARV:
- • Find 3-5 comparable sales (same beds/baths, similar condition)
- • Properties sold within last 90 days, within 0.5 miles
- • Adjust for differences (lot size, updates, garage)
- • Use average, not highest sale price
- • Add 5-10% pessimism buffer
Example: Comps at $250k, $255k, $260k → Use $255k ARV
2. Purchase Price
What you pay to acquire the property
Include These Costs:
- • Purchase price
- • Closing costs (2-3% of purchase)
- • Inspection fees
- • Appraisal costs
Example: $180k purchase + $5k closing = $185k total acquisition
3. Rehab Costs
Money spent renovating the property
Typical Rehab Items:
- • Kitchen: $15k-30k
- • Bathrooms: $8k-15k each
- • Flooring: $3-8 per sq ft
- • Paint: $2-4 per sq ft
- • HVAC replacement: $5k-8k
- • Roof: $8k-15k
- • Permits: $500-2k
- • Add 20% contingency buffer
Example: $35k estimated + 20% buffer = $42k budgeted
4. Holding Costs
Costs while you own the property
Monthly Holding Costs:
- • Loan interest payments
- • Property taxes
- • Insurance
- • Utilities
- • HOA fees (if applicable)
- • Multiply by months to hold (typically 6-8)
Example: $2,000/month × 6 months = $12k holding costs
5. Selling Costs
Costs to sell the finished property
Typical Selling Costs:
- • Agent commission: 5-6% of ARV
- • Closing costs: 1-2% of ARV
- • Staging costs: $2k-5k
- • Total: 7-9% of ARV typically
Example: $255k ARV × 8% = $20,400 selling costs
Complete Fix & Flip Example
Real Flip Analysis
Revenue
ARV (After Repair Value): $255,000
Costs
- Purchase Price: $180,000
- Closing Costs (Buy): $5,000
- Rehab Costs: $42,000
- Holding Costs (6mo): $12,000
- Selling Costs (8%): $20,400
- Total Costs: $259,400
Net Profit Calculation
- ARV: $255,000
- - Total Costs: -$259,400
- Net Loss: -$4,400
Verdict: DON'T DO THIS DEAL! Needs lower purchase price or higher ARV.
The 70% Rule for Quick Analysis
Maximum Purchase Price Formula
Max Purchase = (ARV × 70%) - Rehab Costs
Example:
ARV: $255,000
Rehab: $42,000
Max Purchase: ($255k × 70%) - $42k = $136,500
The 70% rule ensures sufficient profit margin after all costs. Adjust to 65% in competitive markets or 75% if experienced.
Common Flip Calculator Mistakes
❌ Overly Optimistic ARV
Using highest comp instead of average = overestimating profit by $10k-30k. Use conservative ARV estimates.
❌ Underestimating Rehab Costs
Forgetting permits, dumpster, surprises during demo. ALWAYS add 20% rehab contingency buffer.
❌ Ignoring Holding Costs
6 months of loan interest, taxes, insurance = $10k-15k. Can turn profitable flip into break-even.
❌ Forgetting Selling Costs
Agent commission alone is 5-6% of ARV. On $250k flip = $12.5k-15k just in commission.
Flip Profit Targets by Experience
Beginner Flipper
Minimum Profit: $30k-40k
Need buffer for mistakes, learning curve, longer timeline
Intermediate Flipper
Minimum Profit: $25k-30k
More efficient, better contractor relationships, faster timeline
Experienced Flipper
Minimum Profit: $20k-25k
Volume game, streamlined process, can do lower-margin deals
Built-In Flip Calculator
OnMarketCRM includes comprehensive fix & flip calculators. Estimate ARV, calculate rehab costs, factor holding costs, determine max purchase price. Know if a flip deal works before you buy.
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