Analyze potential profit, ROI, and the 70% rule for your next project.
Total Capital Invested:$0.00
Max Allowable Offer (70% Rule):$0.00
Net Profit:$0.00
Return on Investment (ROI):0.00%
Understanding Real Estate Flipping Calculations
House flipping is a high-risk, high-reward real estate strategy that involves purchasing a property, renovating it, and selling it for a profit. The success of a flip relies heavily on the accuracy of the numbers before the purchase is ever made. A Flip House Calculator helps investors determine the viability of a deal by analyzing the spread between the purchase price plus costs and the After Repair Value (ARV).
What is ARV?
The After Repair Value (ARV) is the estimated value of a property after all renovations are completed. This is the critical starting point for any flip calculation. It is determined by looking at "comps" (comparable sales) in the neighborhood—properties of similar size and condition that have sold recently. If you overestimate the ARV, your entire profit margin can disappear.
The 70% Rule in House Flipping
Experienced investors often use the "70% Rule" as a quick filter to determine the maximum price they should pay for a property. The rule states that an investor should pay no more than 70% of the ARV of a property minus the repairs needed.
While this is a general guideline and may vary depending on the market (some competitive markets operate at 75% or 80%), it ensures a buffer for profit and unexpected costs.
Breakdown of Flip Costs
To calculate net profit accurately, you must account for all expense categories, not just the purchase price and repairs:
Buying Costs: Closing costs, title insurance, and recording fees when you buy the property.
Rehab Costs: Materials, labor, permits, and contractor fees. Always add a contingency fund (10-20%) for unexpected issues.
Holding Costs: Costs incurred while you own the property. This includes property taxes, insurance, utilities, and HOA fees during the renovation and sales period.
Financing Costs: If you use a hard money loan or private money, this includes origination points, interest payments, and other loan fees.
Selling Costs: The most significant selling cost is usually the real estate agent commissions (typically 5-6%), plus transfer taxes and closing fees.
How to Calculate ROI on a Flip
Return on Investment (ROI) measures the efficiency of the investment. In flipping, it compares the net profit to the total capital invested in the deal.
ROI Formula: (Net Profit / Total Investment) × 100
A "good" ROI depends on the investor's goals and risk tolerance, but many flippers target an ROI of at least 15-20% to justify the effort and risk involved in a renovation project.
function calculateFlip() {
// 1. Get input values
var arv = parseFloat(document.getElementById('arv').value);
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value);
var rehabCosts = parseFloat(document.getElementById('rehabCosts').value);
var buyingCosts = parseFloat(document.getElementById('buyingCosts').value);
var holdingCosts = parseFloat(document.getElementById('holdingCosts').value);
var financingCosts = parseFloat(document.getElementById('financingCosts').value);
var sellingCosts = parseFloat(document.getElementById('sellingCosts').value);
// 2. Validate inputs (Treat empty inputs as 0 for costs, but require ARV and Purchase Price)
if (isNaN(arv) || isNaN(purchasePrice)) {
alert("Please enter at least the After Repair Value (ARV) and Purchase Price.");
return;
}
// Set defaults to 0 if NaN
if (isNaN(rehabCosts)) rehabCosts = 0;
if (isNaN(buyingCosts)) buyingCosts = 0;
if (isNaN(holdingCosts)) holdingCosts = 0;
if (isNaN(financingCosts)) financingCosts = 0;
if (isNaN(sellingCosts)) sellingCosts = 0;
// 3. Perform Calculations
// Total Investment = Purchase Price + All Costs
var totalInvestment = purchasePrice + rehabCosts + buyingCosts + holdingCosts + financingCosts + sellingCosts;
// Note: Some definitions of ROI exclude selling costs from 'Investment' and deduct them from revenue.
// For simplicity and conservatism, we treat total cash out the door (including final settlement deductions) as the cost basis relative to profit.
// Net Profit = ARV – Total Investment
var netProfit = arv – totalInvestment;
// ROI = (Profit / Total Investment) * 100
var roi = 0;
if (totalInvestment > 0) {
roi = (netProfit / totalInvestment) * 100;
}
// 70% Rule Calculation: (ARV * 0.70) – Rehab Costs
var rule70Price = (arv * 0.70) – rehabCosts;
// 4. Update the DOM
document.getElementById('displayTotalInvestment').innerText = formatCurrency(totalInvestment);
document.getElementById('displayProfit').innerText = formatCurrency(netProfit);
document.getElementById('displayROI').innerText = roi.toFixed(2) + '%';
document.getElementById('display70Rule').innerText = formatCurrency(rule70Price);
// Style changes based on profit
var profitRow = document.getElementById('profitRow');
if (netProfit >= 0) {
profitRow.style.color = '#047857'; // Green
} else {
profitRow.style.color = '#dc2626'; // Red
}
// 70% Rule Feedback
var message = "";
if (purchasePrice <= rule70Price) {
message = "Great Deal: Your purchase price is below the 70% rule threshold.";
document.getElementById('ruleMessage').style.backgroundColor = "#d1fae5";
document.getElementById('ruleMessage').style.color = "#065f46";
} else {
var diff = purchasePrice – rule70Price;
message = "Caution: Your purchase price is $" + formatNumber(diff) + " above the 70% rule threshold.";
document.getElementById('ruleMessage').style.backgroundColor = "#fee2e2";
document.getElementById('ruleMessage').style.color = "#991b1b";
}
document.getElementById('ruleMessage').innerHTML = message;
// Show results area
document.getElementById('resultsArea').style.display = 'block';
}
function formatCurrency(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
function formatNumber(num) {
return num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}