Calculate Your House Flipping Profit
Estimate house flip profit after purchase, renovation, holding costs, and selling expenses.
The 70% Rule
Successful house flippers follow the 70% Rule: never pay more than 70% of the After Repair Value (ARV) minus renovation costs. For a house worth $320,000 after repairs: $320,000 × 0.70 = $224,000 - $50,000 rehab = $174,000 maximum purchase price. This margin covers holding costs, selling expenses, and ensures a reasonable profit. Most flips that lose money violated this rule.
Hidden Costs That Kill Profits
Holding costs: Mortgage, taxes, insurance, utilities — $2,000-4,000/month on a typical flip. A 3-month delay adds $6,000-12,000 in costs. Selling costs: Agent commission (5-6%), closing costs (1-2%), staging, and repairs = 7-10% of sale price. Unexpected rehab: Budget 15-20% contingency — hidden damage (mold, structural, plumbing) appears in almost every flip.
The average house flip in the US takes 6 months and yields $67,000 gross profit — but 28% of flips break even or lose money. The difference between profitable and unprofitable flippers: discipline on the 70% rule, accurate rehab budgeting (with contingency), and fast renovation timelines. Time is the enemy of flip profits — every extra month costs $2,000-4,000 in holding costs.
