How the math works
How to use it
- Set the ARV from closed comparable sales, not listings. A listing is an asking price; a closed sale is a fact, and the gap between them is where flip budgets die.
- Add time to the holding period, not the best case. Every month costs you taxes, insurance, utilities and loan interest whether or not any work happened that week.
- Hard money is priced well above a mortgage and usually charges points up front. Both are in the calculation because both come out of your profit.
- Read the breakeven sale price last. It is the number that tells you how wrong the market can be before this deal hurts.
A worked example
ARV $320,000, repairs $45,000, bought at $185,000 with $4,000 of closing costs, held six months at $1,200 a month, financed 80% at 11% with 2 points, selling costs 8%. The 70% screen says the most you should pay is $179,000 — you are $6,000 over it. Total cost lands at $277,900 for a profit of $42,100, which is a 40.4% return on the $104,300 of your own cash. It breaks even at a sale price of $274,239, so there is about 14% of room between what you expect and what hurts.
Where this sits in the Financial Literacy resource
A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.
Common questions
What is the 70% rule?
A screening convention: pay no more than 70% of the after-repair value minus the repair budget. The 30% is meant to absorb closing, holding, financing and selling costs and still leave a margin. It is a habit rather than a law — investors in expensive markets often work above it and in cheap ones below it. Treat it as the test for whether a deal deserves a second hour.
Why does the breakeven matter more than the profit?
Because the profit figure assumes everything goes right: the ARV holds, the repairs come in on budget, and it sells on schedule. The breakeven tells you how far the sale price can fall before the whole thing loses money, which is the risk you are actually taking. A thin cushion on a big number is worse than a fat cushion on a small one.
What do people underestimate most?
Two things, consistently: the repair budget and how long it takes to sell. Both compound, because a longer hold means more months of interest, taxes and insurance on top of whatever the overrun cost. Running this at your realistic timeline and again at two months longer is the cheapest stress test there is.
Is hard money worth it?
It buys speed, and speed is often what wins the deal. It also costs points up front and a rate well above a mortgage, and this calculator puts both into the total. Whether that trade works depends on the margin in the specific deal, which is what the breakeven line is telling you.
Are there taxes on the profit?
Almost certainly, and this calculator does not estimate them. A flip is usually treated as ordinary income rather than a capital gain, and if you do it repeatedly the IRS may treat you as a dealer, which changes things further. That is a conversation for a CPA before the second flip, not after.
What this calculator is not
It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this math works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.
Nothing here is stored. Every calculation runs in your browser. No numbers are transmitted, logged or saved to any server, and no account is required. Close the tab and it is gone.