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Fix-and-Flip Profit Margin Calculator

Model your acquisition, rehab, and holding costs to see your net profit, ROI, and maximum allowable offer before you bid.

Acquisition & Rehab Costs

$

Expected final selling price once renovated.

$
$

Holding & Selling Costs

months
$

Utilities, insurance, loan interest, taxes while working.

$

Agent commissions, escrow fees, transfer taxes, typically 6–8% of ARV.

Net Flip Profit Dashboard

Your Deal Snapshot

Deal Viability Strong Deal
After Repair Value (ARV) $0
Total Investment Cost $0
Net Profit $0

Return on Investment

0%

Max Offer (70% Rule)

The 70% Rule is a standard industry benchmark: most flippers won't pay more than 70% of the ARV minus rehab costs, to leave enough margin for profit and unexpected costs.

$0

* MAO = (ARV × 70%) − Rehab Cost. This is a quick industry rule of thumb, not a guarantee of profitability. Always run your full numbers above.

Investment Cost Breakdown

Purchase price$0
Rehab cost$0
Total holding costs$0
Closing costs$0
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Understanding Your Flip Numbers

A practical guide to how this calculator works, what the 70% rule actually protects you from, and where flip budgets typically go wrong.

Fix-and-flip math fails in a specific, predictable way: the purchase price and rehab budget both look reasonable on their own, but the holding costs (the monthly bleed of a mortgage, taxes, insurance, and utilities while the property sits unsold) get treated as an afterthought. A six-month project instead of a projected three-month project can quietly erase most of the profit margin.

This calculator forces holding costs and closing costs into the same total investment figure as your purchase and rehab, so the profit and ROI numbers reflect the full cost of the project, not just the acquisition and renovation. It also calculates your Maximum Allowable Offer using the 70% rule, a standard sanity check flippers use before making an offer.

How the Calculation Works

The calculator adds up every dollar spent to acquire, renovate, and hold the property until sale, then compares that total against the after-repair value to get net profit and ROI.

Total Holding Costs = Monthly Holding Cost × Project Duration (months)

Total Investment Cost = Purchase Price + Rehab Cost + Total Holding Costs + Closing Costs

Net Profit = ARV − Total Investment Cost

ROI = (Net Profit ÷ Total Investment Cost) × 100

Maximum Allowable Offer (MAO) = (ARV × 70%) − Rehab Cost

The 70% rule is a quick screening tool, not a guarantee of profitability. It assumes you'll spend roughly 30% of ARV on rehab, holding costs, closing costs, and profit margin combined. Always run the full calculation above to check your actual numbers.

Worked Example

A property with a $320,000 ARV, purchased for $200,000, with a $45,000 rehab budget, $1,800/month in holding costs over a 4-month project, and $8,000 in closing costs:

  • Total holding costs: $1,800 × 4 = $7,200
  • Total investment cost: $200,000 + $45,000 + $7,200 + $8,000 = $260,200
  • Net profit: $320,000 − $260,200 = $59,800
  • ROI: $59,800 ÷ $260,200 = 23%
  • Maximum Allowable Offer: ($320,000 × 70%) − $45,000 = $224,000 − $45,000 = $179,000

Notice the MAO ($179,000) came in well below the actual purchase price in this example ($200,000). That gap is exactly what the 70% rule is designed to flag: this deal only worked because the project stayed on budget and on schedule. A more conservative offer closer to the MAO would have built in a larger safety margin.

Strengths of This Model

  • ✓Holding costs scale with your actual project duration input, not a fixed guess
  • ✓Includes the 70% rule as a second, independent sanity check on your offer price
  • ✓Separates the four cost categories so you can see which one is squeezing your margin

Limitations to Know

  • ✕Doesn't include selling costs like agent commissions and transfer taxes; add those into your closing costs input manually
  • ✕Assumes the project finishes exactly on the duration you enter; overruns are the most common way flips lose money
  • ✕ARV is your input and the calculator can't verify it against actual comparable sales

Who This Is For, and When Not to Use It

Use this calculator when you're evaluating whether to make an offer on a flip candidate, or comparing two rehab scopes (light cosmetic versus full gut) to see which produces a better ROI on the same property.

Don't rely on it alone if you're new to estimating rehab costs; get a contractor walk-through and written bid before finalizing your rehab number, since an inaccurate rehab estimate throws off every other number in the calculation. If you're weighing a hold-as-rental option instead of a resale, run the same property through the Cash Flow Estimator to compare.

Common Mistakes to Avoid

  • 1Underestimating project duration; permitting delays and contractor scheduling routinely push timelines past the original plan
  • 2Forgetting selling-side costs (agent commission, transfer tax) in the closing costs field, not just buying-side costs
  • 3Skipping a rehab contingency buffer; unexpected issues (plumbing, electrical, structural) are the norm on older properties, not the exception

Frequently Asked Questions

What exactly is the 70% rule, and why 70%?

It's a rule of thumb stating you shouldn't pay more than 70% of ARV minus rehab costs for a flip candidate. The 30% gap is meant to cover holding costs, closing costs on both ends, financing costs, and your profit margin. It's deliberately conservative and works better as a quick first filter than a final decision tool.

What ROI should I be targeting on a flip?

Many flippers target a minimum of 15-20% ROI to justify the risk and effort of a project, with more experienced investors sometimes accepting lower margins on larger-dollar deals where the absolute profit is still substantial. Below 10-15%, a single unexpected cost overrun can wipe out the margin entirely.

Should closing costs include both the purchase and the sale?

Yes. Enter your total combined closing costs, purchase-side (title, escrow, lender fees) plus sale-side (agent commissions, transfer taxes, seller concessions), as a single number in the Closing Costs field. Agent commissions and transfer taxes alone often run 6-8% of ARV, so this line adds up faster than most new flippers expect.

What if I'm considering holding the property as a rental instead of selling?

This calculator is built specifically for a resale exit. If you're weighing a hold-as-rental strategy on the same property, especially one that needs rehab before it's rentable, run the numbers through the BRRRR Calculator instead, and compare the two outcomes side by side.

Related Calculators

BRRRR Calculator

Compare a hold-and-refinance exit against a resale.

Cash Flow Estimator

See how this property performs as a long-term rental.

Airbnb ROI Predictor

Compare a short-term rental hold against flipping.