House Flipping Calculator

House flipping math comes down to one question: did you buy it cheap enough? The 70% rule is the shorthand most flippers use to answer that before making an offer.

70% Rule Maximum Purchase Price = After Repair Value x 0.70 - Renovation Costs

If a house will be worth $300,000 fixed up and needs $50,000 in repairs, the most you should pay is $160,000. The 30% buffer covers selling costs, financing, holding costs, and profit. Paying more than the 70% rule allows is how flippers get squeezed.

The full profit calculation:

Net Profit = Sale Price - Purchase Price - Renovation Costs - Carrying Costs - Buying Closing Costs - Selling Closing Costs

Carrying costs are the monthly expenses while you own the property: loan interest, property taxes, insurance, and utilities. A $200,000 hard money loan at 12% costs about $2,000 per month just in interest. A six-month flip adds $12,000 in carry, a number beginners consistently underestimate.

Buying closing costs typically run 1-3% of the purchase price. Selling closing costs, which are agent commissions plus transfer taxes, typically run 6 to 8% of the sale price. That 8% haircut on a $300,000 sale is $24,000, gone before you see a dollar.

Return on investment:

ROI = Net Profit / Total Cash Invested x 100

There are two honest answers to “what is my ROI”, and they differ by a lot. Leave the cash field blank and the calculator assumes you paid cash, dividing the profit by the full purchase price plus renovation, carry and buying costs. Fill it in with your down payment plus whatever else came out of your own pocket, and you get the leveraged return, which is the one hard money borrowers care about. On the example above, $53,800 of profit is a 23.9% all-cash return and roughly 117% on $46,000 of real cash. Leverage cuts the other way with equal force, so a deal that loses $50,000 can wipe out more than your entire stake.

Annualized ROI adjusts for how long the flip took: (1 + ROI)^(12 / months) - 1. A 12% return in four months is not the same deal as 12% in eighteen.

Most experienced flippers target a minimum $30,000 net profit and at least a 15% annualized ROI, or they pass. The calculator marks both.