The Fix & Flip Profit Calculator models the complete financial outcome of a residential fix-and-flip project — from purchase price through renovation, carrying costs, financing charges, and selling expenses — to deliver a clear net profit, return on investment (ROI), and annualized return. A flip that looks profitable on a napkin often breaks even or loses money once all costs are accounted for. This calculator makes sure nothing is left out.

House flipping remains one of the most popular active real estate strategies in the U.S., but 2025 data from ATTOM's Q3 2025 Home Flipping Report paints a sobering picture: the typical flipped home generated a gross profit of just $60,000 on a $260,000 purchase — a 23.1% gross ROI, the lowest since 2008. After real-world costs (financing, holding, selling, taxes), net returns in many markets are well below 10%. Investors who rely on gut instinct rather than rigorous pre-deal analysis are the ones who learn this the hard way.

Who uses this calculator?

• New investors evaluating their first deal and needing to understand what "all-in cost" really means.
• Experienced flippers stress-testing a deal at different ARV scenarios before committing earnest money.
• Hard money lenders underwriting whether the borrower's project pencils out at 65–70% LTV.
• Real estate wholesalers calculating the Maximum Allowable Offer (MAO) to bring to a distressed seller.
• Joint venture partners splitting profit shares and comparing projected vs. actual outcomes.

In Canada, similar fix-and-flip analysis applies, though the Canada Revenue Agency (CRA) treats gains on properties held for short periods as business income (fully taxable) rather than capital gains (50% inclusion), which significantly impacts net profitability for serial flippers.

Fix-and-flip profit analysis requires capturing five cost categories, not just purchase and sale price. The full formula is:

Worked example:

A distressed ranch home in suburban Atlanta has an ARV of $380,000. The investor purchases for $220,000, puts 20% down ($44,000), and borrows $176,000 at 11% hard money with 2 origination points for a 6-month project.

Note: the $220,000 purchase exceeds the MAO of $193,200 — the investor paid above the 70% rule threshold, explaining the compressed 23% ROI. In the current environment, per ATTOM's 2025 data, the median gross profit is $60,000 on $260,000 purchase prices — underscoring how thin margins have become. The SBA recommends treating each flip as a standalone business venture with full cost accounting.

1. Determine the After Repair Value (ARV). ARV is what the property will sell for after renovation in its fully improved condition. Get ARV from a local real estate agent pulling comparable sales (comps) of similar properties in the same neighborhood that sold in the last 3–6 months. Use only sold comps — not active listings. ARV is your revenue. Be conservative: a $375,000 ARV assumption that proves to be $350,000 can turn a $30,000 projected profit into a $5,000 loss after holding and financing costs.
2. Enter the purchase price and purchase closing costs. Purchase closing costs for investors typically include title insurance, escrow fees, recording fees, and possibly transfer taxes. Hard money lenders may charge origination points here as well. Budget 1.5–2.5% of purchase price for all-in purchase closing costs. On a $220,000 purchase: $3,300–$5,500 in closing costs.
3. Build a detailed renovation budget with contingency. Never use a round-number estimate for renovations. Walk the property with a licensed contractor or use per-square-foot benchmarks: cosmetic flip (paint, flooring, fixtures) = $15–$35/sq ft; mid-range (kitchen, bath, mechanicals) = $35–$75/sq ft; gut renovation = $75–$150/sq ft. Always add a 10–15% contingency line. On a 1,500 sq ft property needing mid-range work: $52,500–$112,500 + contingency.
4. Calculate monthly holding costs. Every month you own the property costs money: property taxes ($200–$800/month), insurance ($100–$250/month for vacant/investor policies), utilities ($150–$350/month during construction), HOA fees if applicable. Budget $500–$1,400/month for a typical single-family home, then multiply by your expected project duration. Add 1–2 months beyond construction for the marketing and closing period.
5. Model your financing costs precisely. Most flips use hard money or private money at 9–12% annual interest plus 1–3 origination points. On $176,000 in financing at 11% for 6 months: interest = $176,000 × 0.11 × 0.5 = $9,680. Two origination points = $3,520. Total financing cost = $13,200 — real cash out of pocket that most beginners underestimate.
6. Calculate selling costs. Real estate agent commissions (buyer's agent + listing agent) typically total 5–6% of sale price. Add staging ($1,500–$5,000), professional photography ($300–$600), title insurance on the sale side, and seller's closing costs. Budget 7–9% of ARV for total selling costs. On a $380,000 ARV: $26,600–$34,200.
7. Compute net profit, ROI, and annualized ROI. Subtract all five cost categories from ARV for net profit. Divide by total cash invested (not total project cost) for ROI. For annualized ROI, raise (1 + ROI) to the power of (12 ÷ months) then subtract 1. This metric lets you compare a 6-month flip against annual investments like REITs or index funds on an apples-to-apples basis.
8. Apply the 70% Rule as a sanity check. MAO = (ARV × 0.70) − Renovation Costs. If your purchase price exceeds MAO, your margin is compressed from the start. In expensive 2025 markets like California or the Northeast, some investors use an 85% rule — but only when they have extreme confidence in ARV accuracy, financing costs, and renovation budget.

The calculator produces several metrics. Here is how to interpret each one:

Gross Profit vs. Net Profit. Gross profit (ARV minus purchase price) is a vanity metric — it tells you nothing about whether the deal makes money. Net profit accounts for renovation, holding, financing, and selling costs. A deal with $80,000 gross profit can easily net $15,000 or less after real costs. Always focus on net profit.

ROI vs. Annualized ROI. A 25% ROI on a 12-month flip is very different from a 25% ROI on a 3-month flip. Annualized ROI normalizes for time, enabling comparison. The 3-month flip with 25% gross ROI annualizes to approximately 144% — far superior capital deployment. Per ATTOM's Q3 2025 data, the median gross ROI before all expenses was 23.1% — meaning net annualized returns after financing and selling costs in many markets fell below 20%.

Cash-on-Cash vs. Total-Project ROI. The calculator shows ROI based on your cash invested (down payment + out-of-pocket costs), not the total project cost including financing. This is the cash-on-cash perspective — it measures how hard your equity is working. Leveraging debt amplifies both gains and losses: a deal that earns 23% total ROI can deliver 40%+ cash-on-cash ROI if you've only put 30% down, or it can deliver a negative return if renovation costs overrun.

The Maximum Allowable Offer (MAO). The 70% Rule MAO is your anchor. If the seller will not accept at or below MAO, the deal likely doesn't work at market-rate costs. The 70% threshold is specifically designed to absorb typical renovation costs, holding costs, financing costs, selling costs, and still leave a target profit margin of approximately 10–15% of ARV. Deviation from MAO requires explicit justification — faster construction timeline, lower financing cost, or confirmed higher-than-average ARV.

Risk sensitivity. Run the calculator at three ARV scenarios: base case, minus 5%, and minus 10%. Verify the deal still produces acceptable profit at the pessimistic scenario. In 2025, buyer demand for move-in-ready homes has remained strong in most markets, but the ATTOM Q3 2025 report notes that Southern metros — historically strong flip markets — now see single-digit net ROI in many Texas markets due to elevated purchase prices and seller concessions required to close.

• Reduce the hold period — time is the enemy of profit. Every extra month you hold the property costs $500–$1,400 in carrying costs plus $1,600–$1,900 in additional interest on a $200,000 loan at 10–11%. Accelerating construction by two months can add $4,000–$6,600 to net profit. Create a week-by-week project schedule before closing and hold your GC accountable to milestones.
• Get three contractor bids — always. A renovation scoped at $60,000 from your first contractor may come in at $44,000 from a second and $38,000 from a third — all from licensed, insured professionals. The $22,000 difference goes straight to net profit. Never hire on a verbal quote, and always get a fixed-price contract with a clear scope of work.
• Negotiate seller financing or creative purchase terms. Every 1% reduction in your hard money rate on a $200,000 loan held for 6 months saves $1,000. Seller financing at 6–7% instead of hard money at 11% saves $4,000–$5,000 in interest on the same loan. Subject-to deals (taking over the seller's existing mortgage) can eliminate origination points entirely and dramatically improve project ROI.
• Prioritize kitchens, baths, and curb appeal. Per industry data from real estate professionals, kitchen and bathroom renovations return 60–80% of their cost in increased ARV, while curb appeal improvements return up to 100–150%. An ugly house on a nice street is often a better flip than a nice house in a declining area — location determines ARV far more than any renovation scope.
• Build a reliable team before your first deal. Seasoned flippers who complete 10+ deals per year frequently run at 30–40% ROI while newcomers struggle to achieve 10%. The difference is almost entirely team quality: a dependable GC, a lender who closes in 7–10 days, and an agent with genuine comp expertise. Invest in team-building before scaling deal volume.
• Track actual vs. projected costs on every line item. After each completed flip, document where your budget was accurate and where it overran. Renovation overruns are the single largest destroyer of flip profit. Common sources: permit delays, unexpected structural issues, HVAC replacement, foundation problems. Experienced flippers budget 15–20% contingency rather than 10%, especially on older properties (pre-1980 construction).
• Understand the tax treatment of flip income. In the U.S., fix-and-flip profits are treated as ordinary income (not capital gains) for most investors, subject to self-employment tax if flipping is your primary business. The IRS applies SE tax of 15.3% on the first $176,100 of net flip income in 2025 (plus federal and state income tax). Factor in a 35–45% combined tax rate when calculating whether a deal is genuinely profitable after taxes.