property calculator

House Flipping Calculator

Calculate house flipping profit potential, including maximum allowable offer, renovation budget, holding costs, and expected ROI for property flips.

Formula Verified by Dr. Thomas Wright, PhD

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Deal Sourcing

Purchase price$

After Repair Value (ARV)$

Renovation & repair costs$

Financing & Holding

Financing interest rate (%)%

Holding period (months)months

Buying & selling costs (fees/commission)$

Results

Project Net Profit

$44,400

Return on Investment (ROI)21.6%

Max Allowable Offer (70% Rule)$135,000

Total Project Cost$205,600

Total Holding Interest$7,600

Monthly Loan Interest$1,267

Tip

Flips move quickly. Save this page to quickly verify margins and adjust bid offers while walking prospective properties.

Formula

House flipping formulas

Total Cost = Price + Repairs + (Monthly Interest × Months) + Fees. Profit = ARV - Total Cost. MAO = (ARV × 0.70) - Repairs.

Estimates flip viability using the 70% rule, monthly holding interest, and closing fee overheads.

Step by step

How the calculation works

1Enter the purchase price and your estimated renovation/repair budget.
2Provide the interest rate for your flip financing (e.g. hard money loan rate).
3Specify the expected holding time in months (rehab time + listing/closing time).
4Estimate your After Repair Value (ARV) based on comps.

Related guides

Learn more about this calculation

Guide

House Flipping Guide: How to Calculate ARV, 70% Rule, and Profit Margin

Underwrite house flips with professional precision. Learn how to calculate after-repair value (ARV), maximum allowable offer (MAO), repair contingency, and financing drag.

Site Guide

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Learn the fastest reliable workflow for using Do The Calculation calculators, reading results, checking formulas, and using save, print, share, and export actions correctly.

Flipping Guide

Analyzing Business Valuations & Exit Metrics

Learn how maximum allowable offers (MAO) and repair budgets impact your house flipping margins.

House Flipping Deal Analysis

Compare the After Repair Value (ARV) sale price against the accumulated costs and your projected net profit.

How to understand and use this calculator

The 70% Rule in House Flipping

The 70% rule is a widely accepted real estate guideline used to determine the maximum price an investor should pay for a fixer-upper. It states that the purchase price should not exceed 70% of the After Repair Value (ARV) minus estimated renovation costs.

For example, if a home's ARV is $300,000 and the repair budget is $50,000, the Maximum Allowable Offer (MAO) is calculated as:

MAO = (ARV × 0.70) - Renovation Budget

MAO = (300,000 × 0.70) - 50,000 = $160,000

Paying more than the MAO reduces your margin of safety, increasing the risk of losing capital if market prices decline or repairs exceed estimates.

Accounting for Holding Costs and Interest

Flipping properties involves significant Holding Costs that erode profits the longer the project takes. These costs include monthly interest payments on acquisition/rehab loans, property taxes, builder risk insurance, utilities, and HOA fees.

Our calculator incorporates a holding cost timeline to demonstrate the daily cost of delay, helping flippers plan project schedules with financial precision. Minimizing the time between purchase, rehab, and sale is key to maximizing margins.

Understanding ARV (After Repair Value) Appraisals

The After Repair Value (ARV) is the projected market value of the property once all renovations are completed. Investors determine ARV by performing a comparative market analysis (CMA), checking the recent sales prices of similar, fully renovated properties within a 0.5-mile radius. Overestimating ARV is the most common cause of unprofitable flips.

Sizing the Renovation Budget and Contingency

When walk-throughs are performed, detail all repair costs (roofing, foundations, cosmetic paint, kitchens). Always include a Contingency Buffer (usually 10% to 20% of the renovation budget) to cover "hidden" damage (like termite issues, dry rot, or faulty wiring) discovered during demolition.

How to Use This Calculator

Enter the purchase price, estimated renovation/repair budget, and your expected After Repair Value (ARV) based on comparable sales. Then add your financing interest rate (typically a hard money or bridge loan rate), the expected holding period in months, and estimated buying/selling costs such as commissions and closing fees.

The calculator computes monthly holding interest on the purchase-plus-rehab loan balance, totals your all-in project cost, and returns net profit, ROI, and the Maximum Allowable Offer (MAO) under the 70% rule so you can quickly sanity-check whether a deal is worth pursuing.

Worked Example: Flipping a $150,000 Fixer-Upper

An investor buys a property for $150,000 and budgets $40,000 for renovations, financing the $190,000 combined balance at 8% interest. The project is expected to take 6 months, with $8,000 in buying/selling costs, and an ARV of $250,000.

Monthly holding interest comes to about $1,267, totaling $7,600 in interest over the 6-month hold. Total project cost — purchase, repairs, holding interest, and fees — comes to about $205,600. Selling at the $250,000 ARV leaves a net profit of about $44,400, roughly a 21.6% return on total project cost. Under the 70% rule, the maximum allowable offer for this deal would have been ($250,000 × 0.70) − $40,000 = $135,000 — meaning at a $150,000 purchase price, this investor paid $15,000 over the conservative MAO threshold, which is why the actual numbers should always be checked against the ARV and repair estimate before offering.

Related Calculators

House flipping is one exit strategy among several — compare it against a buy-rehab-rent-refinance-repeat approach with the BRRRR Calculator, or build a more detailed line-item renovation budget with the Property Flipping Rehab Budget Calculator. Once you have a target purchase price, estimate your transaction costs with the Closing Cost Estimator.

For a faster 70% rule and MAO check before running the full deal math above, try the After Repair Value Calculator. And if you're weighing whether a specific renovation is worth doing rather than sizing a whole flip, the Home Renovation ROI Calculator isolates that single decision.

Related concepts

After Repair Value (ARV)

The projected market value of a property once fully renovated.

70% Rule

A benchmark formula for calculating maximum property purchase prices for renovation projects.

Holding Costs

Ongoing expenses incurred while owning a property before it is sold (interest, tax, utilities).

Frequently Asked Questions

What is ARV?+

After Repair Value (ARV) is the estimated market value of the property after all renovations and repairs are completed, based on comparable sales in the area.

How does the 70% rule protect flippers?+

It establishes a 30% equity margin to absorb unexpected repair costs, selling commissions, finance fees, and market price declines, ensuring the project remains profitable.

What are typical buying and selling costs?+

Buying costs include title fees, transfer taxes, and inspection costs. Selling costs include agent commissions (typically 5-6%), staging, and escrow fees.

What are holding costs in house flipping?+

Holding costs are the ongoing expenses incurred while owning a property before it is sold, including mortgage interest, property taxes, insurance, utilities, and HOA fees.

Why is the project timeline so critical?+

Holding costs accrue daily. The longer a flip takes, the more interest and overhead you pay, directly reducing your net profit and ROI.

What is the 70% rule formula?+

Maximum Allowable Offer (MAO) = (After Repair Value × 0.70) - Renovation Costs.

How do hard money loans work?+

Hard money loans are short-term, high-interest loans (usually 8-15%) issued by private lenders based on the property's value, used to fund acquisition and rehab.

Should I do cosmetic flips or structural flips?+

Cosmetic flips (paint, flooring, fixtures) carry lower risk, shorter timelines, and lower budgets. Structural flips (foundation, roofing, extensions) offer higher value gains but require permits, longer timelines, and higher risk.

What is the importance of comparable sales (comps)?+

Comps are recently sold homes in the immediate area. They establish the actual market price buyers are willing to pay, preventing over-estimation of the ARV.

How do I handle contractors?+

Get multiple bids, check references, require detailed written contracts with milestones, and never pay the full amount upfront before verification.

House Flipping Deal Analysis

Compare the After Repair Value (ARV) sale price against the accumulated costs and your projected net profit.

How to understand and use this calculator

The 70% Rule in House Flipping

For example, if a home's ARV is $300,000 and the repair budget is $50,000, the Maximum Allowable Offer (MAO) is calculated as:

MAO = (ARV × 0.70) - Renovation Budget

MAO = (300,000 × 0.70) - 50,000 = $160,000

Paying more than the MAO reduces your margin of safety, increasing the risk of losing capital if market prices decline or repairs exceed estimates.

Accounting for Holding Costs and Interest

Understanding ARV (After Repair Value) Appraisals

Sizing the Renovation Budget and Contingency

How to Use This Calculator

Worked Example: Flipping a $150,000 Fixer-Upper

Related Calculators

Related concepts

After Repair Value (ARV)

The projected market value of a property once fully renovated.

70% Rule

A benchmark formula for calculating maximum property purchase prices for renovation projects.

Holding Costs

Ongoing expenses incurred while owning a property before it is sold (interest, tax, utilities).

Frequently Asked Questions

What is ARV?+

After Repair Value (ARV) is the estimated market value of the property after all renovations and repairs are completed, based on comparable sales in the area.

How does the 70% rule protect flippers?+

It establishes a 30% equity margin to absorb unexpected repair costs, selling commissions, finance fees, and market price declines, ensuring the project remains profitable.

What are typical buying and selling costs?+

Buying costs include title fees, transfer taxes, and inspection costs. Selling costs include agent commissions (typically 5-6%), staging, and escrow fees.

What are holding costs in house flipping?+

Holding costs are the ongoing expenses incurred while owning a property before it is sold, including mortgage interest, property taxes, insurance, utilities, and HOA fees.

Why is the project timeline so critical?+

Holding costs accrue daily. The longer a flip takes, the more interest and overhead you pay, directly reducing your net profit and ROI.

What is the 70% rule formula?+

Maximum Allowable Offer (MAO) = (After Repair Value × 0.70) - Renovation Costs.

How do hard money loans work?+

Hard money loans are short-term, high-interest loans (usually 8-15%) issued by private lenders based on the property's value, used to fund acquisition and rehab.

Should I do cosmetic flips or structural flips?+

What is the importance of comparable sales (comps)?+

Comps are recently sold homes in the immediate area. They establish the actual market price buyers are willing to pay, preventing over-estimation of the ARV.

How do I handle contractors?+

Get multiple bids, check references, require detailed written contracts with milestones, and never pay the full amount upfront before verification.

House Flipping Calculator

Inputs

Deal Sourcing

Financing & Holding

Results

House flipping formulas

How the calculation works

Learn more about this calculation

House Flipping Guide: How to Calculate ARV, 70% Rule, and Profit Margin

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Analyzing Business Valuations & Exit Metrics

House Flipping Calculator

Inputs

Deal Sourcing

Financing & Holding

Results

Key output metrics

House Flipping Deal Analysis

How to understand and use this calculator

The 70% Rule in House Flipping

Accounting for Holding Costs and Interest

Understanding ARV (After Repair Value) Appraisals

Sizing the Renovation Budget and Contingency

How to Use This Calculator

Worked Example: Flipping a $150,000 Fixer-Upper

Related Calculators

Related concepts

Frequently Asked Questions

House flipping formulas

How the calculation works

Learn more about this calculation

House Flipping Guide: How to Calculate ARV, 70% Rule, and Profit Margin

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Analyzing Business Valuations & Exit Metrics

Key output metrics

House Flipping Deal Analysis

How to understand and use this calculator

The 70% Rule in House Flipping

Accounting for Holding Costs and Interest

Understanding ARV (After Repair Value) Appraisals

Sizing the Renovation Budget and Contingency

How to Use This Calculator

Worked Example: Flipping a $150,000 Fixer-Upper

Related Calculators

Related concepts

Frequently Asked Questions