Flip net profit (simple)
What is a house flip profit calculator?
A house flip profit calculator estimates net profit on a fix-and-flip by subtracting purchase price, rehab budget, and selling costs from after-repair value. Real estate investors, wholesalers, hard-money borrowers, and private lenders use it to screen deals, stress-test ARV and rehab risk, compare simple return on invested capital, and decide when a project needs deeper underwriting for financing carry, holding costs, taxes, and timeline delays.
House flip profit and ROI formula
Net profit equals after-repair value minus purchase price minus rehab budget minus selling costs. Selling costs are modeled as a percentage of ARV. Return on invested capital divides net profit by purchase plus rehab in this simple view.
Net profit = ARV - Purchase price - Rehab budget - (ARV x Selling cost %); ROI % = Net profit / (Purchase price + Rehab budget) x 100- Add acquisition closing costs, loan points, interest carry, insurance, utilities, permits, and contingency outside this headline unless folded into rehab or selling percent.
- ARV quality drives the model; haircut ARV for downside cases before committing capital.
- This is educational modeling, not legal, tax, or lending advice.
Inputs explained
Flip underwriting is most reliable when purchase, rehab, ARV, and selling assumptions match the same property condition story and exit channel.
- Purchase price
- Contract basis or expected all-in acquisition before rehab, aligned with how you count closing costs elsewhere in your spreadsheet.
- Rehab budget
- Scope-backed construction budget including contingency for unknowns. Some investors roll acquisition soft costs into rehab; label the policy consistently.
- After-repair value / ARV
- Estimated resale price after renovation based on comparable sales, finish level, and micro-market demand. Stress-test with conservative and base cases.
- Selling costs
- Percent of ARV covering commissions, transfer taxes, title, escrow, staging, and expected seller concessions at exit.
- Estimated net profit
- Simple flip profit before financing carry, holding costs, income taxes, and partnership splits unless you model them separately.
- ROI on invested capital
- Net profit divided by purchase plus rehab in this calculator, useful as a quick hurdle-rate screen before full cash-on-cash modeling.
Example house flip profit calculation
If purchase is $265,000, rehab is $58,500, ARV is $438,000, and selling costs are nine point five percent of ARV, selling costs are about $41,610 and estimated net profit is about $72,890. On $323,500 invested in purchase plus rehab, ROI on invested capital is about twenty-two point five percent before interest, utilities, insurance, and schedule risk.
Flip net profit (simple)
ARV − purchase − rehab − selling costs
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How to use the flip net profit (simple)
- Input purchase price ($) from your executed contract or realistic offer basis, not the original listing ask.
- Enter rehab budget ($) from a scoped contractor estimate with contingency for permits, material volatility, and hidden-condition risk.
- Set after-repair value / ARV ($) using the most comparable sold comps by bed/bath, square footage, and finish level in the same micro-market.
- Adjust selling costs (% of ARV) for your brokerage, transfer tax, and closing assumptions, then review both estimated net profit and ROI before deciding whether to pursue.
Common house flip profit mistakes
- Using list-price optimism or unadjusted comps for ARV.
- Under-budgeting rehab without contingency or permit and inspection surprises.
- Forgetting acquisition closing costs while counting full resale selling costs.
- Treating simple ROI as annualized return without dividing by project months.
- Ignoring hard-money points, interest, and extension fees in profitable-looking deals.
- Mixing wholesale assignment fees into purchase inconsistently across scenarios.
- Assuming exit price while ignoring days-on-market and price reductions.
Flip underwriting benchmark context
- Common screening heuristic ("70% rule" variants)
- Many flippers use discounted ARV heuristics as quick filters, then replace with line-item underwriting because local labor, taxes, and holding costs vary materially.
- Disposition cost range in many resale markets
- Agent commissions, transfer taxes, title, and closing fees frequently land in the high-single-digit to low-double-digit percent range of resale price.
- Simple model vs full project P&L
- Deal outcomes often diverge from simple profit math when debt service, points, insurance, utilities, and schedule delays are included.
Best use cases
- Forecasting and scenario planning
- Client education and pre-qualification
- Budget and performance decision support
FAQs
Does this model include interest, hard-money points, and holding costs?
No. This is a simple profit screen focused on purchase, rehab, ARV, and selling costs. You should layer financing costs, taxes, insurance, utilities, and timeline risk in a full project budget.
How should I set ARV without overestimating resale value?
Anchor ARV to recent sold comps with similar condition and finish quality, then stress-test downside scenarios. Overstated ARV is one of the most common causes of failed flip pro formas.
What belongs in selling costs (%) for a flip?
Typically commissions, closing fees, transfer taxes, and seller concessions expected at resale. Keep this percentage aligned with your local market norms and brokerage agreement.
Why can ROI look strong here but cash profit still disappoint?
ROI can look attractive in a simplified model while absolute dollars shrink from delays, change orders, or carrying costs. Use this output as a first-pass filter, not a final investment memo.
How much rehab contingency should I add before trusting net profit?
Many investors hold ten to twenty percent contingency on top of contractor bids for older homes, long permit cycles, and supply volatility. Add contingency dollars to rehab or reduce ARV in parallel scenarios so profit survives hidden mechanical, mold, or foundation issues.
How do I stress-test ARV if the market cools before I list?
Run three ARV cases: base, minus three to five percent, and minus eight to twelve percent depending on liquidity. Selling costs may compress slightly on a lower sale, but profit falls mostly through the ARV line, so pre-plan price reduction and extra carry months.
Should I include acquisition closing costs in purchase price or rehab?
Either works if you do it once. Many investors increase effective purchase basis with title, recording, and lender fees. Double-counting those fees in both purchase and selling costs inflates profit downward incorrectly.
How does a longer flip timeline change whether this deal clears my hurdle?
Longer holds raise interest, utilities, insurance, lawn, security, and opportunity cost even when ARV is unchanged. Convert timeline into dollars and subtract from net profit, or reduce acceptable purchase price until simple profit still clears your minimum after carry.
What if I partner fifty-fifty on capital—is ROI still meaningful?
ROI on total invested capital still shows project economics, but each partner cares about cash contributed and profit split. Model distributions after preferred returns, promote waterfalls, and separate management fees if one partner runs the rehab.
How should I treat a wholesale or assignment fee in this calculator?
Add assignment or wholesale fees to effective purchase basis if you are the end buyer, or subtract from flip profit if you are the wholesaler modeling the buyer economics. Keep buyer versus seller fee roles explicit so ARV and purchase line up with the same counterparty view.
Glossary
Scenario modeling
Testing multiple assumptions to estimate possible outcomes before execution.
Commercial intent
User behavior indicating readiness to buy, subscribe, or request a quote.
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Category: Real estate investment analysisTopics: House flipping, ARV underwriting, Fix-and-flip ROI
Last reviewed: 2026-05-07
Reviewed by: Calclet Growth Team