GetToolr

How to Use This Calculator

Enter your purchase price, after-repair value (ARV), and financing details. Then break down your rehab budget by category and add a contingency buffer for unexpected costs. The calculator automatically computes holding costs based on your timeline, both buy-side and sell-side closing costs, and gives you a deal grade from A to F.

Calculator

Fix & Flip Profit Calculator

Estimate rehab costs, holding costs, and net profit with the 70% rule and deal scoring.

70% Rule (MAO)

Max offer: $146,950

OVER

Deal Score

Based on ROI + profit margin

B

Purchase & ARV

$
$
%

Financing

%
%
%

Rehab Budget

$
$
$
$
$
$
$
$
$
$
%

Total Rehab

$28,050

(incl. $2,550 contingency)

Holding Period

mo
$
$
$
$

Selling Costs

%
%
%

Net Profit (Before Tax)

$39,900

After tax: $30,324

Returns

ROI69.3%
ROI (After Tax)52.6%
Annualized ROI166.3%
Profit Margin16.0%

Cost Breakdown

Purchase + Closing$155,700
Rehab (w/ contingency)$28,050
Holding (5 mo)$8,850
Loan Interest$6,750
Selling Costs$17,500
Total Project Cost$210,100

Cash Required

Down Payment$15,000
Buy Closing$3,000
Loan Points$2,700
Rehab$28,050
Holding Costs$8,850
Total Cash Needed$57,600

The 70% Rule Explained

The 70% rule is the most widely used quick-screening formula for flippers. It tells you the maximum you should pay for a property to ensure enough margin for profit after accounting for rehab, holding costs, and closing costs.

The formula is simple: Maximum Allowable Offer (MAO) = ARV x 70% - Rehab Cost. If a property has an ARV of $200,000 and needs $30,000 in work, your maximum offer is $110,000 ($200,000 x 0.70 - $30,000).

How Deal Scoring Works

Grade A

20%+ margin, 40%+ ROI

Excellent deal. Strong profit margin with room for error. Worth moving fast on.

Grade B

15%+ margin, 25%+ ROI

Good deal. Solid returns with reasonable risk. Most successful flips fall here.

Grade C

10%+ margin, 15%+ ROI

Marginal deal. Thin margins leave little room for cost overruns.

Grade D/F

Below 10% margin

Weak deal. A single surprise cost could eliminate your profit.

Rehab Budgeting Tips

Focus on value-add renovations

Kitchens and bathrooms deliver the highest ROI for flippers. A $10,000-15,000 kitchen remodel can add $20,000-30,000 in value. New flooring, fresh paint, and updated lighting are high-impact, low-cost improvements. Avoid over-improving for the neighborhood. Your finishes should match the top 20% of comparable homes, not exceed them.

Budget rule of thumb

For cosmetic rehabs (paint, flooring, fixtures), budget $15-25 per square foot. For moderate rehabs (kitchen, bathroom, some systems), budget $25-50 per square foot. For full gut renovations, budget $50-100+ per square foot. These vary significantly by market.

Example: Flipping a $150,000 Property

Purchase Price
$150,000
Buy Closing Costs (2%)
$3,000
Hard Money Points (2%)
$2,700
Rehab Budget + Contingency
$28,050
Holding Costs (5 months)
$9,500
ARV (Sale Price)
$250,000
Selling Costs (7%)
-$17,500
Net Profit
$39,250
ROI on Cash
47.8%
Deal Grade
A

Capital Gains Tax on Flips

Flips held less than 12 months are taxed as short-term capital gains at your ordinary income tax rate (22-37% for most flippers). A $40,000 profit at a 24% tax rate means $9,600 to the IRS.

If you can hold the property for over 12 months, gains are taxed at the lower long-term capital gains rate (0-20%). Some flippers convert deals to rentals if the flip market slows, holding for 12+ months to qualify for the lower rate.

Frequently Asked Questions

What is the 70% rule in house flipping?
The 70% rule states that you should pay no more than 70% of a property's after-repair value (ARV) minus the cost of repairs. For example, if a property has an ARV of $250,000 and needs $40,000 in repairs, your maximum offer should be $135,000 ($250,000 x 0.70 - $40,000). This leaves enough margin for holding costs, closing costs, and profit.
What is a good profit margin on a flip?
Most experienced flippers target a minimum net profit of 10-15% of the ARV, or at least $25,000-30,000 per deal after all costs. Deals with less than 10% margin carry too much risk because unexpected costs can wipe out your profit. ROI on cash invested should be at least 20-25%.
How much should I budget for rehab contingency?
Budget 10-15% of your total rehab cost as a contingency buffer. If your rehab estimate is $40,000, add $4,000-6,000 for unexpected issues like hidden water damage, electrical problems, or permit delays. First-time flippers should use 15-20% because estimates tend to be less accurate early on.
What holding costs do most flippers forget?
The most commonly forgotten holding costs are hard money interest payments during rehab, utility bills, lawn maintenance, HOA fees, and insurance. On a 5-month flip with a $150,000 hard money loan at 12%, interest alone costs $7,500. Add taxes, insurance, and utilities and holding costs can reach $10,000-15,000.
Should I use hard money or private money for flips?
Hard money lenders are easier to find and more predictable, but charge 10-14% interest plus 1-3 points. Private lenders (individuals) may offer better terms (8-10%, fewer points) but require relationship building. As you build a track record, private money becomes more accessible and cost-effective.

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