Calculating Excise Tax in Massachusetts

Fix and Flip Profit Calculator

Estimated Profit $0.00

Return on Investment (ROI) 0.00%

Total Investment: $0

70% Rule Max Bid: $0

function calculateFlipProfit() { var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0; var arv = parseFloat(document.getElementById('afterRepairValue').value) || 0; var rehab = parseFloat(document.getElementById('repairCosts').value) || 0; var monthlyHold = parseFloat(document.getElementById('holdingCosts').value) || 0; var months = parseFloat(document.getElementById('projectDuration').value) || 0; var closing = parseFloat(document.getElementById('closingCosts').value) || 0; var totalHolding = monthlyHold * months; var totalInvestment = purchasePrice + rehab + totalHolding + closing; var netProfit = arv – totalInvestment; var roi = (netProfit / totalInvestment) * 100; // The 70% Rule: (ARV * 0.70) – Rehab var ruleOf70 = (arv * 0.70) – rehab; document.getElementById('netProfit').innerText = '$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('roiValue').innerText = roi.toFixed(2) + '%'; document.getElementById('totalInvestment').innerText = '$' + totalInvestment.toLocaleString(); document.getElementById('seventyPercentRule').innerText = '$' + ruleOf70.toLocaleString(); document.getElementById('results-area').style.display = 'block'; }

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Understanding Your Real Estate Flip Potential

Calculating the profitability of a house flip involves more than just subtracting the purchase price from the sale price. To be a successful real estate investor, you must account for the "hidden" costs that eat into your margins.

Key Metrics Explained

• After Repair Value (ARV): This is the estimated market value of the property after all renovations are completed. It is based on "comparables" (comps) in the local neighborhood.
• Total Rehab Budget: This includes materials, labor, permits, and a contingency fund (usually 10-15%) for unexpected issues like mold or structural repairs.
• Holding Costs: Often overlooked, these include property taxes, insurance, utilities, and interest payments on hard money loans for every month you own the property.
• The 70% Rule: A common industry standard suggesting you should never pay more than 70% of the ARV minus rehab costs. If the calculator shows your purchase price is higher than the "70% Rule Max Bid," you may be overpaying.

Example Calculation

Imagine you find a distressed property for $150,000. You estimate the ARV at $250,000 after spending $40,000 on a new kitchen and flooring. If your holding costs are $1,200/month and the project takes 6 months ($7,200), and your selling costs (realtor fees and title) are $15,000, your total investment is $212,200. Your net profit would be $37,800, representing a 17.8% ROI.

Pro Tip: Always overestimate your renovation timeline. If you plan for 4 months, calculate for 6. Delays in permits or contractor availability can quickly drain your profits through extended holding costs.