Fix & Flip Calculator

How to evaluate a fix-and-flip deal

The deals that go wrong almost never looked bad on paper. They looked fine — until the rehab ran over, or the ARV didn't materialise, or the property sat on the market for three months instead of three weeks. Flipping has a way of punishing optimistic assumptions more harshly than most investments, because every cost category has room to expand and the timeline is the one thing you can't fully control. The calculator above runs the numbers as entered; this section explains which numbers to be skeptical about.

The 70% rule exists for exactly this reason: don't pay more than 70% of ARV minus repair costs. It's a screen, not a formula for success — tight markets, expensive rehabs, and slow sales all compress margins regardless of what you paid. But it forces a margin of safety into the acquisition price, which is the one number you can actually control before the deal starts.

Worked example

Purchase: $180,000. Repairs: $45,000. ARV: $320,000. Six-month hold at $1,200/month = $7,200 in carrying costs. Buy-side closing at 1.5% = $2,700. Financing and points: $8,000. Total project cost: $242,900. Sell-side costs: agent 5.5% + closing 2% + transfer tax 0.4% = 7.9% of $320,000 = $25,280. Net sale proceeds: $294,720. Net profit: $51,820. Total ROI: 21.3%. Annualized ROI: 42.6%.

70% rule check: $320,000 × 0.70 − $45,000 = $179,000 max offer. The $180,000 purchase is $1,000 over — close enough in practice, but right on the edge. Worth noting that the break-even sale price is calculated by dividing total project cost by (1 − sell-cost rate), so it accounts for the real cost structure, not a fixed estimate.

Total ROI vs annualized ROI

Total ROI tells you what you made on what you put in. Annualized ROI lets you compare deals of different lengths on equal footing. A 21% return in 6 months is 42% annualized — substantially better than a 30% return over 18 months (20% annualized). This matters when deciding whether to hold out for a higher sale price: every extra month the property sits, your annualized return declines even if the absolute profit stays the same. Time is a real cost in flipping and it's easy to lose track of it while the deal is active.

Where margins actually compress

Most flips that underperform do so in one of four places:

• Scope creep: Renovations find hidden problems once walls open up. Budget a 10–15% contingency on every rehab and treat it as money already spent.
• Timeline overrun: A 4-month project that takes 8 months cuts annualized ROI in half. Contractor availability, permit delays, and inspection schedules all kill schedules.
• ARV miss: If comparable sales don't support your projected price at listing, you either cut the price or sit longer. Both hurt. Pull comps hard before you buy, not after you renovate.
• Carrying cost undercount: Property taxes, insurance, utilities, and loan interest during the hold are real money. At 6 months and $1,200/month, that's $7,200 off the bottom line before a single thing goes wrong.

When to walk away

A deal that only works if everything goes perfectly is not a good deal. Most experienced flippers want to see: at least $30,000–$50,000 in net profit (enough cushion to absorb real surprises), total ROI above 20%, a purchase price at or under the 70% rule, and a scenario where the deal still works if the ARV comes in 5% lower than projected. If you need a perfect rehab estimate, a precise ARV, and a fast market to break even — the margin is too thin. Pass and find the next one.

Use this calculator to screen opportunities, then validate contractor bids, closing costs, financing terms, carrying costs, and local resale comps before making an offer.

Frequently asked questions