About the House Flipping Calculator
Flipping a house means buying a property, usually one that needs work, renovating it and selling it for more than the total cost. Television makes it look easy, but the profit depends on many costs that are easy to overlook: closing costs on both purchase and sale, holding costs every month the house is owned, loan interest, and agent commissions. Repairs that run over budget and months that stretch into more months are the most common reasons flips disappoint.
This house flipping calculator adds up every major cost of a flip and compares the total with the expected sale price, or after repair value. It shows the profit, the return on the cash you put in, the annualised return over the holding period, and the profit margin as a share of the sale price.
How to Use the House Flipping Calculator
Enter the purchase price, the expected sale price and the repair budget.
Enter buying closing costs and selling costs as percentages.
Enter the months held and the holding costs per month.
Enter the share of the purchase financed and the loan interest rate, or 0 for a cash deal.
The Formulas
closing = purchase × buying costs %
holding = monthly holding costs × months
interest = loan × rate × months ÷ 12
selling = sale price × selling costs %
total cost = purchase + closing + repairs + holding + interest + selling
profit = sale price − total cost
cash in = purchase − loan + closing + repairs + holding + interest
ROI = profit ÷ cash inStep-by-Step Example
Buy for 200,000 with 80% financed at 10%, 40,000 of repairs, sell for 310,000 after six months.
closing 200,000 × 2% = 4,000
holding 1,500 × 6 = 9,000
interest 160,000 × 10% × 6 ÷ 12 = 8,000
selling 310,000 × 8% = 24,800
total 285,800
profit 310,000 − 285,800 = 24,200
cash in 101,000 → ROI 23.96%, about 53.7% a year
margin 24,200 ÷ 310,000 = 7.81%Holding Costs and Time
Every month a flip is owned costs money: property taxes, insurance (usually a vacant or builder's risk policy), utilities, HOA dues, lawn care and loan interest. In the example, holding and interest together cost 2,833 a month. A renovation that takes nine months instead of six, or a sale that takes three extra months, cuts the profit by about a third. Plans that assume everything goes to schedule rarely survive contact with contractors, permits and buyers.
Financing a Flip
Many flippers use hard money loans, short-term loans secured by the property and based largely on its after repair value. They close quickly but charge high interest, often 9 to 14%, plus upfront points. Borrowing reduces the cash needed and raises the ROI on that cash, but adds interest cost and risk: if the house does not sell, the payments continue. Points and loan fees can be added to the buying closing costs percentage.
Selling Costs
Selling costs are often the largest single cost after the purchase and repairs. Agent commissions, the buyer's closing cost concessions, transfer taxes, title fees and staging commonly total 6 to 10% of the sale price. Some flippers sell without an agent to save the commission, but this can mean a slower sale or a lower price.
Profit Margin and Risk
A healthy flip leaves room for things to go wrong. Many investors look for a profit of at least 10 to 15% of the sale price, or a minimum dollar amount, before committing. The example's 7.8% margin is thin: a 10% overrun on repairs and a two-month delay would wipe out about 40% of it. Use the ARV calculator and the 70% rule to screen deals, then this calculator to check the full numbers.
Building a Repair Budget
A realistic repair budget starts with a detailed scope of work: every room, system and finish. Get quotes from contractors before buying if possible, and add a contingency of 10 to 20% for problems found once walls and floors are opened. Common surprises include outdated wiring, plumbing leaks, foundation cracks, roof damage and permit requirements that expand the work.
Taxes on Flip Profits
In the US, homes bought and sold quickly as a business are usually treated as inventory, so profits are taxed as ordinary income rather than as capital gains, and may also be subject to self-employment tax. Keep careful records of every cost, which reduce the taxable profit, and speak to a tax adviser before the first deal.
Exit Strategies
If the house does not sell at the expected price, alternatives include renting it out, refinancing into a long-term loan, or cutting the price. Running the rent vs sell calculator in advance helps judge whether renting would be a viable fallback.
Running Scenarios
Before buying, run the numbers three ways: the expected case, a slower case with two or three extra months, and a worse case with a lower sale price and a repair overrun. If the worse case still breaks even, the deal has a safety margin. If even the expected case is thin, it is often wiser to walk away and wait for a better property.
Understanding Your Result
The headline gives the profit or loss.
The costs line breaks down the total cost.
The return line gives the ROI on cash invested and the annualised return.
The margin line gives profit as a share of the sale price.
When Should You Use This Calculator?
Use it before making an offer on a flip.
Use it to test the effect of delays and repair overruns.
Use it to compare cash and borrowed financing.
Common Mistakes
Forgetting selling costs. They can equal the profit.
Underestimating holding time. Every month costs money.
No contingency in repairs. Overruns are common.
Ignoring taxes. Flip profits are usually taxed as income.