Success in real estate investing, specifically the "fix and flip" strategy, relies entirely on accurate numbers. A House Flipper Calculator is the primary tool used by investors to determine the viability of a project before making an offer. By inputting the After Repair Value (ARV), renovation costs, and carrying expenses, you can project your Net Profit and Return on Investment (ROI).
Understanding the Core Inputs
To use this calculator effectively, you must understand the key metrics:
After Repair Value (ARV): This is the estimated market value of the property after renovations are complete. This is usually determined by looking at "comps" (comparable sales) in the neighborhood.
Repair Costs: The total capital required to bring the property up to market standards. It is wise to add a contingency percentage (usually 10-15%) for unforeseen issues.
Holding Costs: Often overlooked by beginners, these are the costs incurred while you own the property. They include property taxes, insurance, utilities, and loan interest payments (hard money costs).
The 70% Rule in House Flipping
One of the most common rules of thumb in the industry is the 70% Rule. This rule states that an investor should pay no more than 70% of the ARV of a property minus the repairs. The formula is:
Max Offer = (ARV × 0.70) – Repairs
The remaining 30% creates a buffer that covers holding costs, closing costs, and profit. While this calculator provides a detailed breakdown, the 70% rule is an excellent quick filter to see if a deal is worth analyzing further.
Analyzing ROI (Return on Investment)
ROI is the ultimate measure of efficiency. In flipping, a "good" ROI depends on your risk tolerance and market conditions, but many investors aim for at least 15-20% ROI on a short-term flip. If your calculation shows a profit but a low ROI (under 10%), the risk of going over budget or market fluctuations may outweigh the potential reward.
function calculateFlip() {
// 1. Get Input Values
var arv = parseFloat(document.getElementById('arv').value) || 0;
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var repairCosts = parseFloat(document.getElementById('repairCosts').value) || 0;
var contingencyPercent = parseFloat(document.getElementById('contingency').value) || 0;
var buyingCosts = parseFloat(document.getElementById('buyingCosts').value) || 0;
var sellingCosts = parseFloat(document.getElementById('sellingCosts').value) || 0;
var holdingPeriod = parseFloat(document.getElementById('holdingPeriod').value) || 0;
var monthlyCosts = parseFloat(document.getElementById('monthlyCosts').value) || 0;
// 2. Perform Calculations
// Calculate Contingency amount
var contingencyAmount = repairCosts * (contingencyPercent / 100);
var totalRepair = repairCosts + contingencyAmount;
// Calculate Total Holding Costs
var totalHoldingCosts = monthlyCosts * holdingPeriod;
// Calculate Total Invested (Cost Basis)
// Note: Selling costs are usually deducted from proceeds, not added to investment upfront,
// but for ROI calculation, we look at Total Cash Out vs Total Cash In or Net Profit / Total Cost.
// Standard Flip ROI = Net Profit / Total Cost.
var totalCost = purchasePrice + totalRepair + buyingCosts + totalHoldingCosts + sellingCosts;
// Gross Proceeds
var grossProceeds = arv; // We treat selling costs as an expense line item above for Total Cost calculation simplicity.
// Net Profit
var netProfit = arv – totalCost;
// ROI
var roi = 0;
if (totalCost > 0) {
roi = (netProfit / totalCost) * 100;
}
// 70% Rule Calculation
// MAO = (ARV * 0.70) – Repair Costs (excluding contingency usually, strictly strictly math, but safer to include totalRepair)
var mao70 = (arv * 0.70) – totalRepair;
// 3. Format Output
var resultDiv = document.getElementById('result');
var profitClass = netProfit >= 0 ? 'profit-positive' : 'profit-negative';
var html = '
Net Profit:$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '
';
html += '
Return on Investment (ROI):' + roi.toFixed(2) + '%
';
html += '
70% Rule Check:To meet the 70% rule, your Max Allowable Offer (MAO) should be approx: $' + mao70.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '