The 70% Rule Comparison:
According to the 70% rule, you should pay no more than $0.00 for this property based on the provided ARV and Repairs.
function calculateFlip() {
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var arv = parseFloat(document.getElementById('arv').value) || 0;
var repairs = parseFloat(document.getElementById('repairCosts').value) || 0;
var closingPercent = parseFloat(document.getElementById('closingCosts').value) || 0;
var holdingMonthly = parseFloat(document.getElementById('holdingMonthly').value) || 0;
var months = parseFloat(document.getElementById('flipMonths').value) || 0;
// Logic for Transaction Costs (usually based on ARV for selling and purchase for buying)
// Simplified: Percentage applied to ARV as a total round-trip cost
var transactionCosts = (arv * (closingPercent / 100));
var totalHolding = holdingMonthly * months;
var totalCarry = transactionCosts + totalHolding;
var totalInvestment = purchasePrice + repairs + totalCarry;
var netProfit = arv – totalInvestment;
var roi = 0;
if (totalInvestment > 0) {
roi = (netProfit / totalInvestment) * 100;
}
// 70% Rule: (ARV * 0.7) – Repairs
var maxOffer = (arv * 0.7) – repairs;
// Display
document.getElementById('totalInvestment').innerHTML = '$' + totalInvestment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCarry').innerHTML = '$' + totalCarry.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var profitEl = document.getElementById('netProfit');
profitEl.innerHTML = '$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (netProfit >= 0) {
profitEl.className = 'result-value profit-positive';
} else {
profitEl.className = 'result-value profit-negative';
}
document.getElementById('roiValue').innerHTML = roi.toFixed(2) + '%';
document.getElementById('maxPurchase').innerHTML = '$' + maxOffer.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
// Run once on load
calculateFlip();
Understanding House Flip Math: A Guide for Real Estate Investors
Successful house flipping isn't about what you see on reality TV; it's about the math. Professional investors don't rely on gut feelings—they use rigorous house flip calculator models to ensure every deal provides a sufficient margin of safety. Whether you are building your own house flip calculator in Excel or using this online tool, understanding the core metrics is vital.
Key Metrics in House Flipping
After Repair Value (ARV)
The ARV is the most critical number in your calculation. It represents the estimated market value of the property after all renovations and repairs are completed. To find an accurate ARV, you must look at "comparables" (comps)—recently sold properties in the same neighborhood with similar square footage and finishes.
The 70% Rule
Many veteran flippers use the 70% rule as a quick "litmus test" for a deal. The rule suggests that an investor should pay no more than 70% of the ARV, minus the cost of repairs. For example, if a house will be worth $250,000 (ARV) and needs $50,000 in repairs:
$250,000 x 0.70 = $175,000
$175,000 – $50,000 = $125,000 Maximum Purchase Price
Carrying and Closing Costs
Often overlooked by beginners, these costs can evaporate your profits. Carrying costs (or holding costs) include property taxes, insurance, utilities, and interest payments on loans while the house is being renovated. Closing costs occur twice: once when you buy the property and once when you sell it (including Realtor commissions, which typically range from 5% to 6%).
Real-World Example
Imagine you find a distressed property for $150,000. You estimate the ARV at $250,000 and repair costs at $40,000. If the project takes 6 months with $1,200/month in holding costs and you estimate 8% for total closing/selling costs ($20,000), your total investment is approximately $217,200. This leaves a net profit of $32,800, representing a 15.1% ROI. While profitable, this deal actually exceeds the 70% rule, suggesting a tighter margin than ideal for some investors.
Why Use a Calculator Over a Simple Spreadsheet?
While a house flip calculator excel sheet is great for record-keeping, an online calculator allows for rapid "on-the-go" analysis when you are touring properties. It helps you quickly adjust variables—like increasing repair costs or a longer timeline—to see how "worst-case scenarios" impact your bottom line. Always leave a "buffer" in your repair budget for unexpected issues like plumbing leaks or electrical upgrades found behind the walls.