What can you pay for this flip?

Your deal

Profit is before income tax. Nothing here is saved.

Edit the numbers, then click Analyze.

Result

Where the money goes

Sensitivity: sale price

Sensitivity: extra months on the market

How it is calculated

Costs: purchase price, buying closing costs, rehab plus contingency, hard-money interest and points, holding costs for every month held (rehab plus sale period), other costs, and selling costs as a percentage of the sale price. Interest is paid monthly: the purchase loan is outstanding for the whole hold, the rehab loan is drawn evenly across the rehab months, so it averages half during the rehab. Contingency is assumed to be paid in cash. Points apply to the total loan.

Profit is the sale price (your ARV) minus all costs. Cash needed is every cost before sale minus the loan principal. Return on cash is profit divided by cash needed, and the annualised figure compounds it over the months held. The maximum allowable offer is the purchase price at which profit equals your target, the larger of the percentage of ARV and the minimum dollar amount. The break-even sale price is the sale price at which profit is zero. The 70% rule figure is 70% of ARV minus rehab, shown for comparison.

Not modelled: income tax, state transfer taxes, draw fees, appraisal and inspection fees beyond the closing figure, lender minimum-interest clauses, extension fees, and any change in the market while you hold. Unverified: checked by hand calculation and unit tests only, not against any lender's statement.

Common questions

What is the 70% rule in house flipping?

Investors often offer no more than 70% of the after-repair value minus the rehab budget. It is a shortcut that ignores your loan terms, how long the job takes and your local selling costs. This tool shows the 70% figure next to a maximum offer computed from your own financing, holding and selling costs, so you can see where the shortcut is too generous or too cautious.

What is the maximum allowable offer (MAO)?

The highest purchase price at which the deal still leaves your target profit after buying costs, rehab with contingency, hard-money interest and points, holding costs and selling costs. Financing costs scale with the purchase price, so the tool solves for it directly rather than using a fixed percentage.

How is hard-money interest calculated here?

Interest is paid monthly on the loan balance. The purchase loan is outstanding for the whole hold. The rehab loan is drawn evenly across the rehab period, so it averages half its size during the rehab and is fully outstanding while the property is on the market. Points are charged on the total loan.

What is after-repair value (ARV)?

The price you expect the finished property to sell for, usually taken from recent nearby sales of similar renovated homes. Every result depends on it, which is why the sensitivity table shows profit at 15%, 10% and 5% below your ARV.

Why does time on the market matter so much?

Each extra month costs loan interest, taxes, insurance and utilities while the sale price stays the same. The second sensitivity table adds months to the sale period and shows the number of extra months that would erase the whole profit.

What return on cash should I expect from a flip?

There is no standard answer, and the tool does not judge one. It shows profit, return on the cash you put in, and that return annualised for the length of the hold, so you can compare a flip with the other uses of the same money.

Does it include income tax?

No. Profit is before income tax. A flip held under a year is normally taxed as ordinary income, and flipping can also trigger self-employment tax, so keep back a share of profit for a tax professional to size.

What does it leave out?

Income tax, state transfer taxes, draw fees, appraisal and inspection fees beyond the closing figure you enter, lender minimum-interest clauses, extension fees, permit delays, and any change in market prices while you hold. It is rough arithmetic on the figures you enter, not advice.

Is my data uploaded anywhere?

No. Everything you type stays in this browser tab. There are no accounts, cookies or analytics vendors.

Selling the contract rather than flipping? The wholesale real estate offer calculator works out your maximum offer and fee from the buyer's ceiling.

Borrowing for the flip? The hard money loan cost calculator compares two lenders on draw fees, minimum interest, points and extension fees.