Fix and flip calculator
Most flip spreadsheets forget the holding costs and the sale costs. This counts every one of them, then tells you what the 70% rule says you should have paid.
Fix and flip calculator
The costs that eat flip profit
Almost every losing flip was profitable on the first spreadsheet. The gap between that spreadsheet and the closing statement is four categories people leave out.
1. Financing, which is charged twice
Hard money costs points up front and interest every month. Two points on a $212,500 loan is $4,250 before you own the house, and 11% interest-only on that balance is about $1,950 a month. On a six-month hold that is over $16,000 — a number that rarely appears in a first pass.
2. Holding costs, which scale with delay
Property tax, insurance, utilities, lawn, security. Six hundred to a thousand a month on a typical single-family, and the month that matters is the one after your projected sale date. Model the hold one or two months longer than you expect; that is what usually happens.
3. Selling costs, which are a percentage of the biggest number in the deal
Commission plus seller-side closing costs typically runs 7–9% of the sale price. On a $340,000 ARV that is around $27,000 — often larger than the entire projected profit.
4. The rehab overrun
Not modelled here because it is not knowable, but experienced flippers add 10–20% contingency to the rehab line. Enter that in the rehab budget rather than hoping.
What the 70% rule is for
Maximum allowable offer = 70% of ARV, minus the rehab budget. It is not a law of nature; it is a rough allowance for exactly the four categories above plus a profit margin. In hot markets flippers stretch to 75% and above, and that is precisely when thin deals turn into losses, because the buffer the rule was providing has been spent on the purchase price.
Use it as a sanity check on the offer, then use the full cost model above to confirm the deal actually works.
Guides that explain this
Written with the same engine, so every figure agrees with the calculator.
APR vs interest rate: what actually separates themWhat separates APR from the interest rate, which fees are included, and why APR quietly flatters a loan you will not keep for its full term.8 min read
Student loan repayment without guessingRepayment plans compared on total cost, when refinancing federal loans is a mistake, and how capitalisation quietly inflates your balance.10 min read
How your credit score sets your interest rateWhat a credit score is built from, how score bands translate into real rate differences and dollars, and which actions move a score quickly versus slowly.10 min read
Questions people actually ask
What is the 70% rule in house flipping?
Pay no more than 70% of the after-repair value minus the rehab budget. On a $340,000 ARV with $55,000 of rehab, that caps the offer at $183,000. The 30% gap covers financing, holding costs, selling costs and profit.
How much does hard money cost on a flip?
Typically 2–3 points up front plus 10–12% interest-only. On a $212,500 loan held six months at 11% with 2 points, that is roughly $4,250 in points and $11,700 in interest — about $16,000 of financing cost.
What profit margin should a flip target?
Most experienced flippers want at least 10–15% of ARV as profit after every cost. Below 10% there is no room for a rehab overrun or a slow sale, both of which are common.
Why include selling costs when I have not sold yet?
Because commission and seller closing costs run 7–9% of the sale price and come out of your proceeds. On a $340,000 sale that is around $27,000, which frequently exceeds the projected profit.