Project profit and carry
Fix and Flip Calculator
Flip profit is the sale price less every cost — and the costs that sink projects are the ones that never appear on a napkin: points, interest carry, contingency and commission. The example below shows $53,004 of profit on a $385,000 sale, a 13.8% margin, and the exact price at which the deal breaks even.
Project result
Net profit
+$53,004
$385,000 sale price less $331,996 of total project cost, including $26,950 of selling costs.
Return on cash
77.3%
On $68,576 of your own money.
Profit margin on ARV
13.8%
Experienced flippers target 15% or more.
Break-even sale price
$328,007
Below this the project loses money.
70% rule maximum offer
$201,300
You are $8,700 above it.
Hard money cost
$18,326
$4,729 in points plus $13,597 of carry.
Annualised equivalent
214%
If you could repeat this 6-month project back to back.
Total project cost
Purchase + closing + rehab + points + carry + holding + selling
= $210,000 + $4,200 + $68,200 + $4,729 + $13,597 + $4,320 + $26,950
= $331,996
Profit
Profit = ARV − total project cost
= $385,000 − $331,996
= +$53,004
70% rule
MAO = ARV × 70% − rehab
= $385,000 × 0.70 − $68,200
= $201,300
| Cost stack | Amount |
|---|---|
| Purchase price | $210,000 |
| Purchase closing costs | $4,200 |
| Rehab, including 10% contingency | $68,200 |
| Lender points | $4,729 |
| Loan interest, 6 months | $13,597 |
| Holding costs | $4,320 |
| Selling costs at 7.0% | $26,950 |
| Total project cost | $331,996 |
| Your money | Amount |
|---|---|
| Hard money advance85% of cost | $236,470 |
| Cash you put in | $68,576 |
| Sale price | $385,000 |
| Net profit | +$53,004 |
| Return on cash | 77.3% |
| Profit per month held | $8,834 |
The four costs that turn a good flip into a bad one
Purchase price and rehab are the two numbers everybody gets right. These are the ones that move the answer without ever being discussed.
| Cost | Example | % of profit | Driver |
|---|---|---|---|
| Selling costs at 7% | $26,950 | 50.8% | Sale price, fixed by market |
| Hard money interest | $13,597 | 25.7% | Months held — the one you control |
| Rehab contingency at 10% | $6,200 | 11.7% | Age and condition of the house |
| Lender points at 2% | $4,729 | 8.9% | Loan size, paid on day one |
Together those four are $51,476 — 97% of the projected profit. A flip is not a construction business with some transaction costs attached; it is a transaction business with some construction attached.
Why the break-even sale price matters more than the profit
The example projects $53,004 of profit at a $385,000 sale, but the more useful number is the break-even: $328,007. That is a 14.8% cushion between what you expect and what you need — the amount the market can move against you before the project costs you money rather than making it.
Break-even is where every cost lands, so it moves for every mistake. Two extra months of carry pushes it to $334,429. A $10,000 rehab overrun pushes it to $338,760. Both together and the cushion has halved.
Return on cash flatters short projects
Common questions about fix and flip maths
- How do you calculate profit on a flip?
- Profit is the sale price minus every cost: purchase price, purchase closing costs, rehab including contingency, lender points, loan interest for the months you hold it, carrying costs, and selling costs. On the example here, a $385,000 sale against $331,996 of total cost is $53,004 of profit.
- What profit margin should a flip target?
- Most experienced flippers underwrite to at least 15% of after-repair value, and many want 20% on anything requiring structural or systems work. The example lands at 13.8%, which is why the 70% rule flags the purchase price as $8,700 too high.
- How much does hard money actually cost?
- Two ways at once. Points are charged up front — two points on a $236,470 loan is $4,729 — and interest accrues monthly on the drawn balance. At 11.5% over six months that is another $13,597. Together, $18,326, or 4.8% of the sale price, before you have paid a single contractor.
- What holding costs do people forget?
- Utilities on a vacant house running heat through a winter, vacant-property insurance at several times a normal landlord premium, property tax accruing daily, lawn and snow, permit fees, and dumpster rental. Budget them monthly and multiply by a realistic timeline, not an optimistic one.
- What happens if the flip takes longer than planned?
- Interest and holding costs are the only truly time-dependent lines, and on this example they cost $2,986 a month combined. Two extra months is $5,972 — over 11% of the projected profit — and that is before any price reduction needed to move a house that has been sitting.
For the quick offer filter, see the 70% rule. If you would rather keep the property than sell it, the same rehab feeds the BRRRR calculator, and the finished rental underwrites on the rental property calculator.
The rest of the deal, on the same numbers
Your inputs are shared across every calculator on this site, so changing a figure here changes it everywhere.
- rental property calculatorThe full underwriting model: NOI, cap rate, cash-on-cash, DSCR, amortisation, a 30-year projection and a printable deal report.
- cap rate calculatorNet operating income divided by price, with every expense line shown and the debt service deliberately left out.
- dscr calculatorDebt service coverage ratio against real lender thresholds, plus the loan amount your NOI will actually support.
- cash on cash return calculatorAnnual pre-tax cash flow over every dollar of cash you put in — down payment, closing costs and rehab.
- rental property roi calculatorAll four return components — cash flow, principal paydown, appreciation and tax shelter — added up honestly.
- real estate investment calculatorYear-by-year projection to your exit, with equity multiple and IRR at every possible sale year.
- noi calculatorNet operating income built line by line from gross scheduled rent, and why the mortgage never appears in it.
- gross rent multiplierPrice divided by gross annual rent — the fastest screen there is, and the one that hides the most.
- rental yield calculatorGross yield and net yield side by side, with the gap between them explained in dollars.
- brrrr calculatorBuy, rehab, rent, refinance, repeat — cash left in the deal, capital recycled, and infinite returns handled properly.
- house hack calculatorWhat your housing actually costs once tenants cover part of it, and what the building looks like after you move out.
- short term rental calculatorADR and occupancy through to NOI, with the long-term lease comparison that decides whether the extra work pays.
- seller financing calculatorOwner-carry notes: payment, balloon balance, interest to the balloon, and what the seller nets versus a cash sale.
- rental property depreciation calculator27.5-year straight line with the IRS mid-month convention, the annual tax shield, and recapture at sale.
- 1 percent rule real estateMonthly rent against purchase price, what the rule was calibrated for, and the interest rate at which it stops working.
- 50 percent rule real estateHalf of gross rent goes to operating expenses. Tested against your own itemised budget, line by line.
- 70 percent rule house flippingMaximum allowable offer for a flip: 70% of after-repair value, less the rehab budget.
- printable rental property deal reportThe whole analysis on one page, laid out for Letter and A4, ready to print or send to a lender.
- real estate investing terms glossaryEvery metric on this site defined once, with its formula and a worked example from the same deal.