House Flip ROI Calculator

What it does

Run the full house-flip investor screen: ROI, annualized ROI, 70% rule pass/fail, holding costs, and worst-case scenarios. Inputs: purchase price, rehab budget, After-Repair Value (ARV), holding period in months, selling costs (typically 6% commission + 2% closing), and financing details if not all-cash. Output: total profit, ROI on cash invested, annualized ROI (compares to other investments), and margin of safety against the 70% rule.

The 70% rule is the industry-standard guardrail: max offer = ARV × 70% − rehab cost. On a $300,000 ARV property needing $40,000 rehab, max offer is $300K × 0.70 − $40K = $170K. The 30% buffer covers acquisition costs, holding costs (interest on hard-money loans 10-15% annual + property tax + utilities + insurance during rehab), selling costs, and your profit target. Deals failing the 70% rule typically have under 10% margin of error — minor budget overruns turn them into break-even or losing flips.

Real-world risks the calculator can’t fully model: rehab budget overruns (rookie flippers routinely 30-50% over; uncovered plumbing, electrical, foundation issues drive most overruns — keep 20% contingency reserve),holding-period drag (every extra month of holding costs ~$2-3K net on typical flips; permitting delays, unexpected demolition, contractor scheduling all extend timelines), market timing (flipping during a market correction can wipe profit even with perfect execution), financing risk(hard-money lender refuses extension if rehab drags; force-sale at distressed prices), and quality risk (under-rehab to save money but ARV doesn’t materialize because buyers see issues; over-rehab beyond comps to chase a higher ARV).

How to use it

1. Enter purchase price (use realistic acquisition price including any closing-cost negotiations).
2. Enter rehab budget — get 3 contractor bids, then add 20% contingency.
3. Enter ARV (After-Repair Value) — based on 5-10 recent comparable sales of fully-renovated homes in same neighborhood.
4. Set holding period — 3-9 months typical (light cosmetic 8-12 weeks; gut rehab 6-9 months).
5. Enter financing if not all-cash: hard-money rate (10-15%), points (2-4 upfront), down payment (typically 10-25%).
6. Read total profit, ROI, annualized ROI, and 70%-rule margin. Reject deals failing the 70% rule unless you have specific advantages.

When to use this tool

• Pre-offer screening — running quick numbers on candidate flips before bidding.
• Auction preparation — knowing your max bid based on ARV and rehab estimates.
• Due diligence — sanity-checking that a deal actually returns acceptable ROI after all costs.
• Comparing flips vs other investments — the annualized ROI lets you compare to stock-market returns or rental cash flow.

When not to use it

• BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) — that's a different model where you keep the property; use a buy-and-hold rental analysis.
• Wholesaling — you're not actually flipping; you're assigning contract for fee. Different math.
• New construction — different cost structure (land + build cost + permitting); flip ROI calculator doesn't capture it well.
• Properties needing major structural work (foundation replacement, addition) — those have non-standard cost lines this calculator doesn't itemize.

Common use cases

• Verifying a number or output before passing it on
• Quick calculation during a typical workday
• Pre-decision sanity-check on inputs and outputs
• Educational use — demonstrating the underlying concept