House Flip Calculator
Calculate profit, ROI, and cash needed for flipping houses. Includes 70% rule analysis.
Purchase Details
Financing
Renovation & Holding Costs
Sale Details
Net Profit
$36,300
Investment Returns
Cost Breakdown
70% Rule Analysis
Max Purchase Price: $145,000
Your Purchase: $150,000
This deal does NOT meet the 70% rule. Consider offering $145,000 or less.
Total Cash Tied Up: $73,700 for 4 months
Profit Per Month: $9,075
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About This Calculator
The House Flip Calculator analyzes fix-and-flip real estate deals using the industry-standard 70% Rule and comprehensive profit projections. With house flipping ROI dropping to 25.1% in Q2 2025—the lowest since 2008—according to ATTOM Data, accurate deal analysis has never been more critical. This calculator computes your Maximum Allowable Offer (MAO), holding costs, selling expenses, and true net profit. Whether you're evaluating your first cosmetic flip or a full gut renovation, understanding the numbers before making an offer separates profitable flippers from those who lose money—and 12% of house flips in 2025 sold at break-even or a loss. The average gross profit in Q2 2025 was $65,300, but after rehab costs and fees, net profits tell a very different story.
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How to Use the House Flip Calculator
- 1Enter the After-Repair Value (ARV)—research comparable sales within 0.5 miles sold in the last 90 days to estimate what your renovated property will sell for.
- 2Input your estimated repair costs including materials, labor, permits, and a 10-20% contingency for unexpected issues discovered during renovation.
- 3Enter your planned purchase price or use the calculator's Maximum Allowable Offer (MAO) suggestion based on the 70% Rule.
- 4Add monthly holding costs: property taxes (annual ÷ 12), insurance, utilities, HOA fees, and loan interest if using financing.
- 5Estimate your holding period—cosmetic flips typically take 3-4 months, moderate rehabs 4-6 months, and full renovations 6-12 months.
- 6Include acquisition costs (closing costs, inspection, title insurance) and selling costs (agent commissions, seller closing costs, staging).
- 7Review the profit analysis including gross profit, net profit, ROI, and whether the deal passes the 70% Rule test.
Formula
MAO = (ARV × 0.70) - Repair CostsThe Maximum Allowable Offer (MAO) formula is the industry-standard 70% Rule. It calculates the highest price you should pay by taking 70% of the After-Repair Value (ARV) and subtracting estimated repair costs. The 30% margin covers selling costs (10%), holding costs and contingencies (10%), and profit (10%). Successful flippers stick to this formula religiously—deviating upward is the primary cause of failed flips.
2025-2026 House Flipping Market Reality Check
The house flipping market has shifted dramatically. Here's what the data shows (ATTOM Data):
Q2 2025 National Statistics:
| Metric | Value | vs. Previous Year |
|---|---|---|
| Average Gross ROI | 25.1% | Down 6.1 points |
| Average Gross Profit | $65,300 | Down $10,300 |
| Median Purchase Price | $259,700 | Highest since 2000 |
| Homes Flipped | 78,621 | Up from Q1 |
| % of All Sales | 7.4% | Down ~1 point |
| All-Cash Purchases | 37% | Down slightly |
Five Consecutive Quarters of ROI Decline: The average house flipping ROI has fallen for five straight quarters. Q2 2025's 25.1% is the lowest since 2008. Rising purchase prices without corresponding resale growth compressed margins across all markets.
Success vs. Failure Rate:
| Outcome | % of Flips |
|---|---|
| Profitable | 88% |
| Break-even or Loss | 12% |
What This Means for 2026:
- Higher purchase prices require stricter deal analysis
- The 70% Rule is more important than ever
- Fast flips (under 4 months) outperform lengthy renovations
- Local market selection dramatically impacts returns
State-by-State House Flipping ROI Rankings (Q2 2025)
Location determines profit more than most flippers realize. State-level data from ATTOM:
Top 10 States for House Flipping ROI:
| Rank | State | Average ROI | Gross Profit |
|---|---|---|---|
| 1 | Maryland | 75.0% | $123,000 |
| 2 | Washington D.C. | 68.5% | $250,000 |
| 3 | Pennsylvania | 64.2% | $89,500 |
| 4 | Vermont | 62.8% | $72,000 |
| 5 | Louisiana | 61.3% | $54,000 |
| 6 | Virginia | 58.7% | $98,000 |
| 7 | New Jersey | 55.4% | $115,000 |
| 8 | Connecticut | 52.1% | $87,000 |
| 9 | Delaware | 49.8% | $68,000 |
| 10 | North Carolina | 47.2% | $62,000 |
Worst States for House Flipping:
| Rank | State | Average ROI | Gross Profit |
|---|---|---|---|
| 50 | Montana | -1.4% | -$6,577 |
| 49 | Utah | 8.2% | $31,000 |
| 48 | Idaho | 11.5% | $38,000 |
| 47 | Arizona | 14.8% | $52,000 |
| 46 | Nevada | 16.2% | $48,000 |
Key Insight: The top-performing states tend to have older housing stock requiring updates, strong job markets, and less new construction competition. Markets with heavy new construction (Mountain West) show weakest flip returns.
The 70% Rule: Maximum Allowable Offer Formula
The 70% Rule is the industry-standard formula for calculating your maximum purchase price:
Formula: MAO = (ARV × 70%) - Repair Costs
Why 70%? The Math Behind the Rule:
| Expense Category | % of ARV | Purpose |
|---|---|---|
| Your Purchase | 70% | Maximum you should pay |
| Selling Costs | 8-10% | Agent commissions, closing |
| Holding Costs | 3-5% | Taxes, insurance, utilities, interest |
| Unexpected | 2-5% | Permit delays, hidden damage |
| Your Profit | 10-15% | Target net margin |
Worked Example:
- ARV (After-Repair Value): $350,000
- Estimated Repairs: $65,000
- MAO = ($350,000 × 0.70) - $65,000
- MAO = $245,000 - $65,000 = $180,000
At $180,000 purchase with $65,000 repairs:
- Total Investment: $245,000
- Gross Profit: $105,000 (30% of ARV)
- After 8% selling costs ($28,000): $77,000
- After 4% holding costs ($14,000): $63,000 Net Profit
- Net ROI: 25.7%
When to Adjust the 70% Rule:
| Scenario | Use % | Reasoning |
|---|---|---|
| Hot market, cosmetic flip | 75% | Fast turn, lower risk |
| Full gut renovation | 65% | Higher uncertainty |
| First-time flipper | 65% | Build in learning curve |
| Cash purchase, fast market | 75% | No interest costs |
| Hard money, slow market | 60-65% | High carry costs |
Complete Cost Breakdown for House Flipping
Every successful flip accounts for ALL costs, not just purchase and repairs:
Acquisition Costs (2-5% of purchase price):
| Cost | Typical Amount |
|---|---|
| Closing Costs | 1-2% |
| Title Insurance | $1,000-$3,000 |
| Home Inspection | $300-$600 |
| Appraisal | $400-$700 |
| Hard Money Points | 2-4 points (2-4%) |
| Attorney/Escrow | $500-$1,500 |
Monthly Holding Costs (calculate for your timeline):
| Cost | Monthly Estimate |
|---|---|
| Property Taxes | Annual ÷ 12 |
| Insurance | $150-$400 |
| Utilities | $200-$500 |
| Hard Money Interest | 12-15% annually |
| HOA (if applicable) | Varies |
| Lawn/Pool/Maintenance | $100-$300 |
Selling Costs (8-10% of ARV):
| Cost | Typical % |
|---|---|
| Buyer Agent Commission | 2.5-3% |
| Listing Agent Commission | 2.5-3% |
| Seller Closing Costs | 1-2% |
| Title Insurance (seller) | 0.5-1% |
| Staging & Photography | $1,000-$3,000 |
| Buyer Concessions | 1-3% (market dependent) |
The "Oh No" Budget (10-20% of repair estimate):
- Foundation issues discovered during demo
- Mold behind walls
- Asbestos or lead paint
- Electrical not up to code
- Plumbing surprises
- Permit delays
Fix-and-Flip Financing Options Compared
How you finance your flip dramatically impacts your true profit:
Financing Comparison:
| Method | Rate | Points | Term | Best For |
|---|---|---|---|---|
| Cash | 0% | 0 | N/A | Maximum profit, fastest closes |
| Hard Money | 12-15% | 2-4 | 6-18 mo | Most flips, speed matters |
| Private Lenders | 8-12% | 1-3 | Negotiable | Repeat investors |
| DSCR Loans | 7-9% | 1-2 | 30 yr | Flip-to-rent strategy |
| Home Equity | 6-8% | 0-1 | 10-30 yr | Own existing property |
| Business LOC | 8-15% | 0 | Revolving | Experienced investors |
Hard Money Cost Example (6-month flip):
| Line Item | Amount |
|---|---|
| Purchase Price | $180,000 |
| Loan Amount (80% LTV) | $144,000 |
| Points (3 points) | $4,320 |
| Monthly Interest (14%) | $1,680 |
| 6 Months Interest | $10,080 |
| Total Financing Cost | $14,400 |
Cash vs. Hard Money ROI Comparison:
| Scenario | Cash | Hard Money |
|---|---|---|
| Total Investment | $245,000 | $101,000 (down payment + repairs) |
| Gross Profit | $77,000 | $77,000 |
| Less: Financing | $0 | $14,400 |
| Net Profit | $77,000 | $62,600 |
| ROI | 31.4% | 62.0% |
Hard money reduces dollar profit but dramatically increases ROI by leveraging less capital. Many flippers prefer higher ROI to do more deals simultaneously.
Repair Cost Estimating by Project Type
Accurate repair estimates prevent profit-killing surprises. Use these per-square-foot benchmarks:
Rehab Level Guidelines:
| Rehab Type | $/Sq Ft | Scope |
|---|---|---|
| Cosmetic | $15-$25 | Paint, flooring, fixtures, landscaping |
| Moderate | $25-$50 | + Kitchen/bath updates, some systems |
| Full Rehab | $50-$100 | + New HVAC, electrical, plumbing |
| Gut Renovation | $100-$200 | Down to studs, complete rebuild |
Individual Project Costs (2025-2026):
| Project | Low | Average | High |
|---|---|---|---|
| Kitchen (mid-range) | $25,000 | $40,000 | $75,000 |
| Kitchen (cosmetic) | $5,000 | $10,000 | $15,000 |
| Bathroom (full) | $10,000 | $18,000 | $35,000 |
| Bathroom (cosmetic) | $2,000 | $4,000 | $6,000 |
| Roof (asphalt) | $8,000 | $12,000 | $20,000 |
| HVAC System | $6,000 | $10,000 | $15,000 |
| Electrical Panel | $1,500 | $2,500 | $4,000 |
| Windows (per) | $300 | $600 | $1,200 |
| Flooring (per sq ft) | $3 | $6 | $12 |
| Paint (per sq ft) | $2 | $4 | $6 |
| Landscaping | $2,000 | $5,000 | $15,000 |
Contractor Markup Reality:
- GC markup: 15-25% on subcontractor work
- Material markup: 10-20% vs. retail
- Always get 3 bids minimum
- Walk properties WITH your contractor before offering
Timeline Impact on Flip Profitability
Every extra month holding a property reduces your profit. Time is the silent profit killer:
Typical Flip Timelines:
| Flip Type | Timeline | Holding Cost Impact |
|---|---|---|
| Cosmetic (paint/floors) | 2-3 months | Low ($3,000-$6,000) |
| Light Rehab | 3-4 months | Moderate ($6,000-$10,000) |
| Moderate Rehab | 4-6 months | Significant ($10,000-$18,000) |
| Full Renovation | 6-9 months | Heavy ($18,000-$30,000) |
| Gut Rehab | 9-12+ months | Profit-killing ($30,000+) |
Monthly Holding Cost Breakdown ($300K ARV property):
| Expense | Monthly Cost |
|---|---|
| Hard Money Interest (14% on $200K) | $2,333 |
| Property Taxes | $400 |
| Insurance | $250 |
| Utilities | $300 |
| Lawn/Maintenance | $150 |
| Monthly Total | $3,433 |
| 6-Month Total | $20,600 |
The Math of Delays: A 2-month permit delay on the above property costs $6,866 in pure holding costs—money coming directly out of your profit.
Speed Strategies:
- Pre-qualify permits before closing
- Have contractors ready before you own the property
- Order materials during due diligence
- Focus on cosmetic flips until you build a reliable team
- Know your municipality's permit timeline
Pro Tips
- 💡Calculate your Maximum Allowable Offer BEFORE viewing properties—emotional attachment during walkthroughs leads to overpaying.
- 💡Walk every potential flip with your contractor before making an offer—photos hide foundation cracks, water damage, and structural issues.
- 💡Use the 70% Rule as your floor, not your target—in today's compressed margin environment (25.1% average ROI), being conservative protects your profit.
- 💡Focus on one market and build deep expertise—Maryland flippers average 75% ROI while Montana flippers lose money, proving location expertise matters.
- 💡Add 15-20% contingency to ALL repair estimates—even experienced flippers underestimate, and surprises always appear behind walls.
- 💡Time your purchase closing to have contractors ready day one—every day of holding without progress costs money.
- 💡Know your municipality's permit timeline before buying—a 6-week permit delay costs $6,000-$12,000 in holding costs.
- 💡Build relationships with 3 reliable contractors before you need them—desperate searches mid-project lead to overpaying and delays.
- 💡Calculate your "walk-away" number before negotiations—knowing your firm MAO prevents emotional overbidding at auction.
- 💡Consider the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) as exit plan B—if the market turns during your flip, renting until recovery beats selling at a loss.
- 💡Use drone photos and video for your listings - properties with aerial views sell 68% faster according to MLS data.
- 💡Stage every flip, even budget-friendly staging - staged homes sell 73% faster and for 6-25% more than unstaged properties.
- 💡Build relationships with wholesalers who can bring you off-market deals at better prices than MLS listings.
- 💡Consider doing your own cosmetic work (painting, landscaping) to save 30-50% on those line items and improve margins.
- 💡Track every expense meticulously for tax purposes - many costs are deductible and proper records maximize your tax benefits.
- 💡Network with other flippers to share contractor recommendations and avoid problem vendors that delay projects.
- 💡Create a property inspection checklist and use it religiously - missing one major issue can eliminate your entire profit.
Frequently Asked Questions
The 70% Rule states that your Maximum Allowable Offer (MAO) should equal 70% of the After-Repair Value (ARV) minus repair costs. Formula: MAO = (ARV × 0.70) - Repairs. This leaves 30% margin to cover selling costs (8-10%), holding costs (3-5%), unexpected expenses (2-5%), and your profit (10-15%). For a $300,000 ARV with $50,000 repairs: MAO = ($300,000 × 0.70) - $50,000 = $160,000.
