Real estate & rental
Real Estate Fix and Flip Calculator
Works the economics of a flip, where the holding period and the overrun are the risks.
Result
Holding costs and budget overruns are what turn projected flips into losses, and both scale with time. A project running three months late pays three extra months of interest, taxes and insurance while the rehab budget has usually already been exceeded. The 70% rule is a screening heuristic, not a valuation method.
Get a Free Business AuditHow the calculation works
Expected resale value less purchase price, renovation cost, holding costs over the expected period, financing cost, and selling costs, giving profit and margin on cash invested. Holding costs are the element most often understated, since taxes, insurance, utilities and interest continue every month the property is not sold.
What moves the number
- Renovation cost and the contingency allowed.
- Holding period, which drives carrying costs and interest.
- Resale value, which is an estimate rather than a fact.
- Financing cost, often at short-term rates.
Where this one goes wrong
Renovation overruns and a longer hold arrive together rather than independently, because the work taking longer is what extends the hold, so the two risks compound rather than offset. Model a longer timeline and a higher renovation cost at the same time rather than separately. Resale value is also an assumption, and a project that only works at the top of the comparable range has no margin for a softer market or an unexpected repair.
Before you quote
- Model a longer hold and a renovation overrun together.
- Base resale value on the middle of the comparable range, not the top.
- Include full selling costs, which are not trivial.
Questions
About this calculator
What usually goes wrong on a flip?
Renovation overruns and a longer holding period, which arrive together because the work taking longer is what extends the hold. Modelling them simultaneously rather than separately is what reveals whether the project survives a bad case.
What resale value should I use?
The middle of the comparable range rather than the top. A project that only works at the best comparable has no margin for a softer market or a repair discovered during the work, and both are ordinary rather than exceptional.
What are holding costs on a flip?
Property taxes, insurance, utilities and interest, continuing every month the property is unsold. On short-term financing the interest alone is substantial, and underestimating the timeline understates every one of these items together.
The formula
profit = ARV - purchase - rehab with overrun - buying costs - holding costs - selling costs
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How to use this calculator
- After repair value ($). Enter your own figure; the page starts at $385,000.
- Purchase price ($). Enter your own figure; the page starts at $245,000.
- Rehab budget ($). Enter your own figure; the page starts at $62,000.
- Budget overrun allowance (%). Enter your own figure; the page starts at 15%.
- Months held. Enter your own figure; the page starts at 6.
- Monthly holding cost ($). Loan interest, taxes, insurance, utilities.
The result updates as you type, so you can try a figure, see what it does to net profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| After repair value | $385,000 |
| Purchase price | $245,000 |
| Rehab budget | $62,000 |
| Budget overrun allowance | 15% |
| Months held | 6 |
| Monthly holding cost | $1,850 |
| Buying costs | 2% |
| Selling costs | 7% |
What comes out
| Result | Value |
|---|---|
| Net profit main result | $25,750 |
| Total invested | $332,300 |
| Return on cost | 7.75% |
| Holding costs | $11,100 |
| Maximum offer at the 70% rule | $198,200 |
Net profit is $25,750, a 7.75% return on $332,300 invested. Holding costs alone took $11,100.
How sensitive the answer is
Holding everything else steady and changing only after repair value, this is what happens to net profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| After repair value ($) | Net profit |
|---|---|
| $192,500 | -$153,275 |
| $288,750 | -$63,763 |
| $385,000 example above | $25,750 |
| $577,500 | $204,775 |
| $770,000 | $383,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- After repair value ($)
- A money amount, starting at $385,000.
- Purchase price ($)
- A money amount, starting at $245,000.
- Rehab budget ($)
- A money amount, starting at $62,000.
- Budget overrun allowance (%)
- A percentage, between 0 and 60, starting at 15%.
- Months held
- A number, between 0 and 48, starting at 6.
- Monthly holding cost ($)
- Loan interest, taxes, insurance, utilities.
- Buying costs (%)
- A percentage, between 0 and 8, starting at 2%.
- Selling costs (%)
- A percentage, between 0 and 15, starting at 7%.
What the results tell you
| Result | What it is |
|---|---|
| Net profit | The headline result. A money figure. |
| Total invested | A money figure. |
| Return on cost | A percentage. |
| Holding costs | A money figure. |
| Maximum offer at the 70% rule | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
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