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Property Flip Profit Calculator

Most novice flippers calculate profit as selling price minus purchase price and renovation costs - and then lose money because they missed the hidden costs that experienced flippers know. Buying closing costs, hard money loan origination points, 6 months of mortgage payments, property taxes, insurance, agent commissions on the sale, and selling closing costs can easily consume 15-20% of a flip's gross profit. This calculator includes every cost category and shows your annualised ROI so you can compare flips of different durations fairly.

Hard money loans: 2-4 points typical

Mortgage, taxes, insurance, utilities

Enter a purchase price and expected selling price to calculate your flip profit.
This calculator provides estimates only. Renovation costs, selling timelines, and market conditions are unpredictable. This is not financial or investment advice. Consult qualified professionals before undertaking a property flip.

How to use this tool

  1. 1Enter the purchase price and total estimated renovation costs.
  2. 2Set the buying closing costs percentage (title, escrow, transfer taxes - typically 2-3%) and loan origination or points percentage if using a hard money loan (typically 2-4%).
  3. 3Enter the holding period in months and your total monthly holding costs: loan interest payment, property taxes, insurance, and utilities.
  4. 4Enter the expected selling price and the agent commission and selling closing costs percentages.
  5. 5Read the net profit, ROI, and annualised ROI. Use annualised ROI to compare a 4-month flip against a 12-month flip fairly.

Formula used

Total acquisition cost = purchase price x (1 + buying closing costs % + origination points %) + renovation costs. Total holding cost = monthly holding costs x holding months. Total selling cost = selling price x (agent commission % + selling closing costs %). Net profit = selling price - total acquisition cost - total holding cost - total selling cost. ROI = net profit / total acquisition cost x 100. Annualised ROI = (1 + ROI/100)^(12/holding months) - 1, expressed as a percentage.

Example

6-month flip: buy 200K, renovate 40K, sell 300K

Purchase: 200,000. Renovation: 40,000. Buying closing: 2% (4,000). Points: 2% (4,000). Holding: 6 months x 2,000/month = 12,000. Selling: 300,000 x 6% agent = 18,000 + 1% closing = 3,000. Total costs: 248,000 + 12,000 + 21,000 = 281,000. Net profit: 19,000. ROI: 7.7%. Annualised: 16.1%. Thin margin - one surprise adds to wipe this out.

Same deal but renovation comes in 15K over budget

Renovation rises to 55,000. Total costs: 263,000 + 12,000 + 21,000 = 296,000. Net profit: 4,000. ROI: 1.5%. Annualised: 3%. Budget overruns are why experienced flippers use a 15-20% contingency and build it into the purchase price from the start.

Common use cases

  • House flippers evaluating whether a potential deal pencils out before making an offer
  • Investors stress-testing a flip with higher renovation costs or lower selling prices
  • Real estate agents helping investor clients understand net profit on a flip
  • Hard money lenders reviewing the projected economics of a borrower's deal
  • Experienced flippers comparing the annualised ROI of multiple simultaneous opportunities

Common mistakes

  • Ignoring holding costs - on a 200,000 hard money loan at 12% annual interest, holding costs alone run 2,000/month; at 8 months that is 16,000 before taxes and utilities.
  • Forgetting agent commission on the sale - 5-6% of the selling price is typically 10,000-20,000 on a standard flip; never leave this out.
  • Using ROI without annualising it - a 20% ROI on a 3-month flip is far more impressive than a 20% ROI on an 18-month flip; always compare on an annualised basis.
  • Underestimating renovation costs - add a minimum 15% contingency to every renovation budget, especially for older properties where surprises hide behind walls.

Frequently asked questions

What is a good ROI for a house flip?

Most experienced flippers target a minimum ROI of 15-20% on the total acquisition cost, or an annualised ROI of 40-60% (accounting for a 4-6 month hold time). In slower markets or longer holds, 10-15% ROI is still acceptable. Anything below 10% leaves too little margin for cost overruns or a price reduction at sale.

What are hard money loan points and should I include them?

Points are an upfront fee charged by hard money lenders, typically 2-4% of the loan amount. On a 160,000 hard money loan, 3 points cost 4,800 at closing. Always include them - they are a real cost that reduces your net profit and often significantly affect deals with thin margins.

Why does annualised ROI matter more than simple ROI for flips?

Simple ROI does not account for time. A 15% return on a 3-month flip equals a 77% annualised return. The same 15% return on a 12-month flip is just 15% annualised. Annualised ROI lets you compare any two flips on equal footing and compare property returns to other investments.

What holding costs should I include?

Include every recurring cost during the hold period: hard money loan interest payment, property taxes (prorated monthly), homeowner insurance, utilities (power, water, gas to maintain the property during renovation), and any HOA fees. For a property with a 180,000 hard money loan at 12% annual interest, the interest alone is 1,800/month.

How do I estimate the right selling price?

The selling price should be based on the after-repair value (ARV): the comparable sale prices of similar renovated homes sold within 0.5-1 mile in the last 3-6 months. Have a local real estate agent pull comps before you buy. The rule of thumb - buy at 70% of ARV minus repairs - builds in enough margin for costs and profit.

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