Enter purchase price, ARV, rehab budget, holding months, and financing terms to see your fix-and-flip net profit, ROI, and the maximum offer the 70% rule supports — before you make an offer.
On the back of the napkin it is gorgeous: buy at $185K, put in $40K, sell at $260K, pocket the difference. Then the hard money lender charges 12% and two points, the rehab finds a cracked foundation behind the drywall, the hold drags from six months to nine, and the agents take 8.5% on the way out the door. The $35K profit on the napkin is $6K in the bank — if you are lucky. This calculator puts every one of those costs in one model before you commit. Enter Purchase Price, After Repair Value (ARV), Rehab Budget, Holding Months, Down Payment percentage, Loan Interest Rate, Loan Points/Fees percentage, Monthly Holding Costs, and Selling Costs percentage — and it returns net profit, ROI, and the 70% Rule maximum offer price.
The 70% Rule output is what separates this tool from a basic spreadsheet. Most experienced flippers will not pay more than 70% of ARV minus rehab costs — that formula is the built-in profit margin buffer on acquisition price. This calculator shows you exactly what the rule allows on any deal, and whether your actual target price is above or below that threshold.
Understanding the 70% Rule and how to use it as a floor, not a ceiling
The 70% Rule states that you should not pay more than 70% of ARV minus estimated repair costs. On a home with a $250,000 ARV and $40,000 in rehab, the rule says: (0.70 x $250,000) - $40,000 = $135,000 maximum offer. The calculator shows this number directly in the Max Offer (70%) output so you can compare it against the actual asking price or your intended offer in real time.
The 70% figure exists to absorb financing costs, carrying costs, selling costs, and a profit margin. In lower-cost markets with efficient timelines, some flippers work at 75% ARV. In expensive markets with slower permitting and higher holding costs, 65% ARV is more appropriate. The calculator lets you test different percentages to find your market's realistic threshold.
When a deal comes to you above the 70% max offer, the model shows you whether it can still work — but usually only if rehab costs are significantly lower than typical, hold time is very short, or ARV has been underestimated. If the numbers only work under best-case assumptions, that is a deal to walk away from.
Financing costs: the most underestimated line in a flip
Hard money lending — the most common financing for fix-and-flip investors — typically charges 10–15% annual interest plus 1–4 origination points on the loan amount. On a $180,000 loan at 12% annual interest over 6 months, interest alone is $10,800. Two origination points adds $3,600. Combined, that is $14,400 in financing cost before a single nail is driven — more than many new flippers budget for.
The calculator captures this through Down Payment (%), Loan Interest Rate (annual), and Loan Points/Fees (%). On a $200,000 purchase price with 20% down ($40,000), the loan amount is $160,000. At 12% annual interest, monthly interest is $1,600. Over six holding months, interest totals $9,600. Two loan points adds $3,200. Total financing cost: $12,800 — a real number that has to come out of your profit before ROI is calculated.
Experienced flippers treat financing cost as a non-negotiable line in the deal math, not something to estimate roughly. The tool makes this precise: change the holding months from 6 to 8 and watch the financing cost increase immediately, directly reducing net profit. Two extra months at $1,600/month in interest is $3,200 less in your pocket — the value of keeping a flip on schedule.
Rehab budget and the contingency you are not counting
The Rehab Budget input is where optimism is most dangerous. Experienced flippers commonly apply a 10–20% contingency to their initial estimate to account for the surprises that happen in virtually every renovation: foundation issues discovered after opening walls, permit delays that extend hold time, contractor scope creep, or material price changes. If your contractor quotes $35,000 for the renovation, enter $42,000 in the tool to see the net profit on the realistic scenario.
The Scenario Comparison tab in the tool shows what happens to profit if rehab runs over by 10%, 20%, or 30%. On a deal where profit looks reasonable at $35,000 rehab, the same deal with a $45,500 rehab (30% over) might leave you with $3,000 in profit — barely above break-even on the time and capital invested.
Many new flippers use the profit sensitivity output to set a maximum acceptable rehab cost: the rehab number at which net profit drops below their minimum required return. If the flip needs to net at least $25,000 to be worth doing, and the current rehab estimate puts profit at $28,000, there is only $3,000 of contingency room. That deal is much riskier than a deal showing $50,000 profit at the same budget.
Selling costs: what you give up when you close
Real estate commissions plus closing costs on the sell side typically run 8–10% of the sale price in most U.S. markets. On a $280,000 ARV, 8.5% selling costs is $23,800 — a significant number that sometimes surprises first-time flippers who were used to the buyer's perspective on closing costs.
The calculator enters selling costs as a percentage of ARV, which is more accurate than a flat estimate because it scales with the exit price. As you adjust ARV in the deal analysis, selling costs adjust proportionally. This matters when you are stress-testing a deal against a softer market: if ARV drops from $280,000 to $265,000, selling costs drop from $23,800 to $22,525 — which partially offsets the ARV reduction.
Monthly Holding Costs — property taxes, insurance, utilities, HOA fees if applicable — are entered as a flat monthly amount and multiplied by holding months. These costs are easy to underestimate because they feel small per month, but over a 6-to-9-month flip they add up to $3,000–$8,000 depending on the market. Enter them honestly and they go into the total cost calculation.
Using the Scenario Comparison to stress-test a deal
The Scenario Comparison tab allows you to model multiple versions of the same deal side by side — base case, rehab overrun, and market softening. This is not optional financial planning; it is required diligence for any deal where the base-case profit margin is thin.
A useful stress test: keep your purchase price fixed, hold rehab at budget, and drop ARV by 8%. Does the deal still produce acceptable profit? Then hold ARV fixed and increase rehab by 20%. Does profit survive? Then combine both: ARV down 8% and rehab up 20%. If that combined scenario produces a loss, you need either a lower purchase price or a significantly higher confidence interval on both ARV and rehab before proceeding.
A bad flip can erase months of earnings in a single transaction. This calculator takes 60 seconds to run and can prevent a six-figure mistake. Download your scenario as CSV and hand it straight to a partner, lender, or accountant — useful for deal review, loan applications, or post-flip analysis. Run every deal through the model before you submit an offer; the ones that look thin on paper usually are.
How to use it
- Enter Purchase Price and After Repair Value (ARV) — the price you intend to offer and what comparable sold properties support as the post-renovation value.
- Set Rehab Budget (total renovation cost) and add a 10–20% contingency to your contractor estimate before entering.
- Enter Holding Months, Down Payment (%), Loan Interest Rate (%), and Loan Points/Fees (%) based on your actual hard money or private lender terms.
- Set Monthly Holding Costs (taxes, insurance, utilities) and Selling Costs (%) — typically 8–10% for agent commissions plus closing.
- Read Net Profit, ROI, Max Offer (70% rule), and Total Costs — then use the Scenario Comparison tab to stress-test the deal against rehab overruns and ARV softening.
Who it's for
- First-time flipper evaluating their first deal before making an offer — Enters a $185,000 ask price against a $255,000 ARV and $42,000 rehab, discovers the 70% rule max offer is $136,500, and decides to offer $155,000 instead of the ask price.
- Experienced investor stress-testing a deal with hard money financing — Finds that 12% hard money at 6 months costs $11,400 in interest plus $4,200 in points — $15,600 in financing that drops their anticipated $45,000 profit to $29,400.
- Investor comparing two deals with different ARVs and hold times — Runs both deals in the calculator and finds the lower-ARV deal with 4-month hold time produces better ROI than the higher-ARV deal requiring 9 months, because financing and holding costs dominate the longer timeline.
- Investor presenting a deal to a private money lender — Exports the full cost breakdown and ROI projection as CSV to show a private lender the deal structure, profit margin, and cost-by-category before requesting a loan.
Key terms
- After Repair Value (ARV)
- The estimated market value of the property after renovation is complete, based on comparable recent sales in the same area. The foundational number all other flip math derives from.
- 70% Rule
- The investor guideline to pay no more than 70% of ARV minus estimated repair costs. Designed to leave enough margin for financing, holding, selling costs, and profit.
- Hard money loan
- Short-term, asset-based financing commonly used for fix-and-flip deals. Typically 10–15% annual interest with 1–4 origination points. Faster to close than conventional financing but significantly more expensive.
- Holding costs
- Monthly expenses incurred while the property is owned but not yet sold — taxes, insurance, utilities, and HOA fees. Multiply by holding months to get total holding cost.
- ROI (Return on Investment)
- Net profit divided by total cash invested (down payment plus out-of-pocket costs). The metric for comparing deal efficiency across different purchase prices and capital levels.
Frequently asked questions
What is ARV and how do I estimate it accurately?
After Repair Value is what the property will be worth once renovations are complete, based on comparable sold properties (comps) in the same neighborhood within the past 90 days. Pull comps from Zillow, Redfin, or an MLS — look for homes with similar square footage, bedroom/bath count, and condition that actually closed, not just listed. ARV is not a wish number; it is the market's current answer.
What should I enter for Selling Costs percentage?
In most U.S. markets, total sell-side costs including buyer's agent commission (2.5–3%), listing agent commission (2.5–3%), and closing costs (1–2%) run 7–10% of the sale price. Use 8.5% as a conservative baseline if you do not have a specific estimate from your market. Some investors negotiate lower commissions or use a flat-fee listing service, which can bring this down.
Should I include my own labor time as a cost?
If you do any of the work yourself, you should assign a market value to your time and include it in the rehab budget. Not doing so inflates apparent ROI and makes self-labor deals look artificially better than deals where you hire everything out. If you plan to hire all labor, your contractor estimate is your rehab budget input.
What is a reasonable target ROI for a fix-and-flip?
Most experienced flippers target $20,000–$30,000 minimum net profit per deal and look for ROI above 15–20% on their invested capital. On a 6-month deal, an annualized ROI of 30–40% is typical for a well-structured flip in a normal market. Below 10% net ROI on invested capital is generally not worth the risk relative to passive investments.
How do I use this calculator if I am paying cash (no financing)?
Set Down Payment to 100%, Loan Interest Rate to 0%, and Loan Points to 0%. Monthly Holding Costs still apply. The 70% Rule max offer is independent of financing — it is a purchase price ceiling based on ARV and rehab alone. Cash deals show lower total costs but the same ARV-based ceiling on what you should pay.