House flip profit calculator

The 70% rule in one paragraph

The most widely-used shortcut in house flipping: never pay more than 70% of the after-repair value (ARV), minus rehab costs. On a home that will be worth $400,000 after $60,000 of renovations, you should pay no more than (0.70 × $400,000) − $60,000 = $220,000. That 30% spread covers holding costs, closing costs, selling costs, and your profit margin. The rule is conservative by design — it's what protects experienced flippers from the deals that eat rookies alive.

This calculator checks your deal against the 70% rule automatically. If the check fails, it doesn't necessarily mean you shouldn't buy — it means the math is tight and you'd better be very confident in your ARV and rehab estimates. Most flippers who go broke do so because they paid too much for the deal, not because rehab costs went over budget.

The six cost categories of a flip

• Purchase price.What you pay for the property. Easy to control — just don't overpay.
• Buy closing costs. Typically 2–3% of purchase price — title, inspection, financing fees, attorney. Use our closing cost calculator for a state-specific estimate.
• Rehab budget. The actual renovation spend. This is where rookies blow their budgets. Experienced flippers add 20% contingency to whatever their contractor quotes.
• Holding cost.Every month you own the property, you're paying mortgage interest, taxes, insurance, utilities, and sometimes HOA. A typical flip's holding cost is $1,800–$3,500 per month. Time kills flips — a 6-month timeline becoming 12 months can wipe out your profit.
• Selling costs.Agent commissions (5–6% historically, more variable post-2024), title insurance, transfer taxes, any concessions to buyer. Total: 6–8% of ARV. Selling FSBO can save ~3%, but you'd better know what you're doing.
• Unexpected costs.Something always surprises you. Hidden mold, structural issues, code violations the seller didn't disclose. Budget 10% contingency on rehab, minimum.

Estimating ARV accurately

Your ARV estimate is the single most important input. If you overestimate by 10%, a projected $50K profit can become a $10K loss. Use our home value estimator as a starting point, but remember that your ARV is what the fully renovatedhome will be worth — not today's as-is value.

Best practice: pull 3–5 closed sales within half a mile of your target, in the last 90 days, that are similar to what your renovated home will be. These are called "renovated comps." They should reflect the same level of finish you're planning — matching flooring grade, kitchen, bath tile quality, appliances. Don't compare your future granite-and-stainless kitchen to a 1998-linoleum comp.

Rehab budgeting by project type

Rough national averages (vary 30–50% by market):

• Paint: $3–$5/sqft interior, $2–$4/sqft exterior.
• Flooring: $4–$12/sqft for LVP, $8–$15 for hardwood, $3–$6 for carpet.
• Kitchen: $15,000–$35,000 for mid-range, $40,000+ for high-end. IKEA cabinets can cut $8K.
• Bathroom: $8,000–$18,000 per full bath, depending on scope.
• Roof: $8,000–$16,000 for typical shingle reroof.
• HVAC: $6,000–$12,000 for replacement.
• Electrical update (panel + some wiring): $3,000–$8,000.
• Plumbing repair/replacement: $2,000–$15,000 depending on scope.
• Windows: $400–$900 per window installed.

Financing a flip

Traditional mortgage lenders don't love flips. Most flippers use one of these options:

• Hard money loans.Short-term (6–24 months), asset-based, high rate (10–14%), fast close (1–2 weeks). Typical cost: 3% origination, 12% rate, 6-month term. On a $200K purchase + $60K rehab loan, that's roughly $7,800 origination + $15,600 interest over 6 months = ~$23,400 total financing cost.
• Private money. Borrow from friends, family, or passive investors. Typically 8–10% rate, flexible terms. Requires relationships and track record.
• Cash. Best cost structure. But ties up capital and limits how many deals you can do at once.
• HELOC on your primary residence.Dangerous — you're risking your home on a flip — but low interest rate makes it attractive for experienced flippers with a strong equity cushion.

Timeline realism

First-time flippers consistently underestimate timeline. A realistic breakdown:

• Purchase to close: 2–6 weeks.
• Permits if required: 2–8 weeks.
• Demolition and rough-in: 3–6 weeks.
• Finishes and punch list: 4–8 weeks.
• Listing to offer: 2–6 weeks (varies by market).
• Offer to close: 3–6 weeks.

Total: 18–34 weeks from purchase to final close, or roughly 4.5–8 months. If you're budgeting 3 months, you're almost certainly going to blow your holding cost budget.

Tax treatment — flippers pay ordinary income tax

Flipping profit is treated as ordinary income plus self-employment tax, not long-term capital gains. A $50,000 profit can easily owe $18,000–$22,000 in federal + state + SE tax. This is a rude surprise for first-time flippers who expected the 15–20% capital gains rate.

The workaround: some flippers hold properties for 1+ year (making it a long-term capital gain) or convert to rental (also gets long-term treatment on eventual sale and has depreciation benefits). But pure flipping is always ordinary income. Budget for taxes in your per-deal profit expectations.

Related calculators

Considering a long-term rental instead? Check our rental yield calculator and investment property calculator. Or estimate ARV with our home value estimator.