Fix & Flip Calculator
What the deal makes — and how much has to go right for it to make that.
The deal
Financing
Financing cost is entered rather than derived — it depends on the draw schedule and on whether the quote is Dutch or non-Dutch. The cost of capital calculator computes it precisely.
Assumptions
Profit
$24,300
7.15% margin · 60.45% annualized on cash
ARV cushion
7.69%
Break-even at $313,871
| Down payment | $31,500 |
|---|---|
| Rehab out of pocket | $22,000 |
| Holding costs | $3,900 |
| Total cash invested | $80,400 |
| All-in cost | $291,900Every cost, cash or borrowed |
| Selling costs | − $23,800 |
| Net sale proceeds | $316,200 |
| Profit | $24,300 |
| Return on cash | 30.22%60.45% annualized |
| Rehab overrun tolerance | $24,30044.18% of the budget |
| Holding cost per extra month | $650A floor — financing accrues on top of this |
Estimates only. A flip pro forma is two guesses in a trench coat — the ARV is a forecast about a sale that has not happened, and the rehab budget is a forecast about work nobody has quoted. Not a loan commitment, an offer of credit, or investment advice.
A profit number without a cushion number is half an answer
Every flip calculator returns a profit figure. On the default scenario here it is $24,300, which sounds like a deal worth doing. It tells you almost nothing on its own, because a profit figure is the output of two forecasts — what it will sell for and what the work will cost — and both are routinely wrong.
So this page reports the two numbers that actually decide whether the profit survives contact with reality.
The first is the ARV cushion. Break-even on the default deal is an ARV of about $313,871 against the $340,000 assumed — a cushion of 7.69 percent. That is how far the market can disappoint you before the profit is gone entirely. Under five percent and the deal is a bet on the appraisal rather than a plan.
The second is the rehab overrun tolerance. It is the profit, restated as a budget: the rehab can run $24,300 over — about 44 percent — before you are working for free. That one is comfortable here, and it very often is not. A deal with 15 percent of overrun tolerance is one bad foundation away from nothing.
Notice also the gap between the two return figures. Margin is 7.15 percent of the sale price, while return on cash is 30 percent — and annualized over a six-month hold, 60 percent. Leverage produces that gap: the profit is the same money measured against a much smaller denominator. Both figures are honest, and quoting only the annualized one is how flips get sold. It also assumes you can immediately find the next deal, which is the least reliable assumption in the model.
One thing this page deliberately does not do is derive your financing cost. That depends on the draw schedule and on whether the quote charges interest on the full commitment or only on what is advanced — a difference worth thousands, and the entire subject of the cost of capital calculator. Compute it there and bring the number here.
The same applies to the two inputs everything hangs on. Build the ARV from real comps with the ARV calculator, and the rehab line by line with the scope of work calculator. Precision in the profit formula cannot rescue a guessed input.
Methodology
- All-in cost = purchase + buy-side closing + rehab + holding + financing. The loan principal is repaid from proceeds and is not a cost; its interest and points are.
- Cash invested = down payment + closing + rehab out of pocket + holding + financing. Cash invested plus the loan equals all-in cost exactly — the check that nothing is double counted.
- Profit = ARV − selling costs − all-in cost.
- Break-even ARV = all-in cost ÷ (1 − selling costs). Cushion is the gap between that and your ARV, as a percent.
- Rehab overrun tolerance is the profit — every extra dollar of rehab is a dollar off the bottom line.
The holding cost per extra month is a floor rather than the full cost of a delay: financing accrues alongside it, and financing is a lump input sized for the planned hold rather than something this page can extend for you.
Excluded: income tax, entity costs, the cost of capital on your own equity, and the possibility that the property does not sell.
Frequently asked questions
- How do you calculate profit on a house flip?
- Sale price, less selling costs, less everything the deal cost: purchase, buy-side closing, rehab, holding, and financing. What remains is profit. The loan principal is not a cost — it is repaid out of proceeds — but the interest and points on it are, which is why financing cost appears as its own line here.
- What is a good profit margin on a flip?
- Under 10 percent of ARV is thin for the risk, because a flip carries execution risk a purchase does not: the rehab can overrun, the schedule can slip, and the sale price is a forecast. But the better question is not the margin, it is the cushion — how far can ARV miss before the profit is gone? If the answer is under five percent, the margin is not real.
- Why does this ask for financing cost instead of a rate?
- Because deriving it properly needs the draw schedule and whether the quote is Dutch or non-Dutch, and those move the number by thousands. The fix and flip cost of capital calculator handles that and gives you a figure to paste in here. Keeping them separate means neither tool has to guess.
- What is the difference between return on cash and profit margin?
- Margin is profit over the sale price — how much of the transaction you keep. Return on cash is profit over what you actually invested, which is much smaller when you borrow. On the default scenario the margin is 7.15 percent and the return on cash is 30 percent, because leverage means the profit is measured against a fraction of the deal. Both are real; they answer different questions.
- Should I annualize the return?
- It is useful for comparing a four-month flip against a ten-month one, and it is easy to over-read. Annualizing assumes you can immediately redeploy the capital into another deal at the same return, which is rarely true — deals take time to find. Treat it as a comparison tool, not a rate you will actually earn over a year.
- How much should I hold back for a rehab overrun?
- The useful framing is the tolerance figure on this page: how much can the rehab exceed budget before the profit disappears? Under 20 percent is fragile, because rehab budgets overrun more often than they come in and the surprises are usually structural rather than cosmetic. Build the budget line by line rather than guessing at it.
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