Fix and Flip Calculator
House-flip analysis: the 70% rule maximum offer, acquisition, rehab with contingency, hard-money interest and points, holding and selling costs, gross and after-tax profit, return on cash, annualised return and break-even sale price.
| 70% rule maximum offer | — |
|---|---|
| Acquisition | — |
| Rehab with contingency | — |
| Financing cost | — |
| Holding costs | — |
| Selling costs | — |
| Total cost | — |
| Gross profit | — |
| Cash invested and return on cash | — |
| Annualised return | — |
| Estimated tax (ordinary income + self-employment tax) | — |
| After-tax profit | — |
| Break-even sale price | — |
In short
The 70% rule says pay no more than 70% of the after-repair value minus repair costs, leaving ~30% for financing, holding, selling costs and profit. A typical flip loses 12–18% of ARV to those costs — hard-money interest at 10–13% plus points, 6–8% selling costs, taxes and utilities while you hold — and the profit is taxed as ordinary income plus 15.3% self-employment tax for regular flippers, not as capital gains.
Who this is for: US house flippers and wholesalers pricing a rehab deal.
Flip economics
- Costs beyond the rehab: buying closing costs (1–3%), hard-money interest (10–13%) and points (1–3), holding costs (taxes, insurance, utilities, lawn, security), and selling costs of 6–8% of the sale price. Together they typically consume 12–18% of ARV — which is where the 70% rule comes from.
- Return on cash is high because hard-money lenders fund 80–90% of purchase and rehab; the price is interest at roughly double a conventional rate.
- Timing: a 6-month flip is typical; 9–12 months on a bigger rehab can halve the annualised return.
- Taxes: ordinary income rates plus self-employment tax for regular flippers — budget 30–45% of profit. Holding a year for long-term rates only works for occasional investors, not dealers.
- Sensitivity: run the ARV 5% lower and the rehab 15% higher before you commit — if the deal still works, it is a deal.
See also: Rental Property Calculator.
Assumptions
- Rehab × (1 + contingency); loan = (price + rehab) × loan %; interest simple for the months held; points on the loan.
- Profit = ARV − price − buying costs − rehab − financing − holding − selling; cash = everything not funded by the loan.
- Tax = 15.3% SE on 92.35% of profit + income tax at the entered rate on profit less half the SE tax.
Worked example
70% rule maximum offer: $294,000 − $55,000 = $239,000 — the $260,000 price is $21,000 above it. Costs: $265,200 acquisition + $60,500 rehab + $20,432 financing ($14,983 interest + $5,448 points) + $4,200 holding + $29,400 selling = $379,732. Gross profit $40,268 (9.6% of ARV). Cash in: about $77,900 → 51.7% in six months (~130% annualised). Tax roughly $5,690 SE + $8,980 income = $14,670, leaving about $25,600 after tax. Break-even sale price about $376,700, 10.3% below ARV.
Frequently asked questions
What is the 70% rule in house flipping?
Pay no more than 70% of the after-repair value minus repair costs. It leaves ~30% of ARV for financing, holding, selling costs and profit.
How are flipping profits taxed?
As ordinary income (plus 15.3% self-employment tax for people who flip regularly), not capital gains — even if you hold the house over a year, dealers do not get long-term rates.
How much profit should a flip make?
Experienced flippers target 10–20% of ARV, or $25,000–50,000+ per project; under 10% leaves too little cushion for overruns.
What do hard-money loans cost?
Typically 10–13% interest plus 1–3 points, funding 80–90% of purchase and rehab for 6–12 months.
What is a good ARV estimate?
Three to five comparable sales within 0.5 miles in the last 90 days, adjusted for condition and size — and verified by your agent and lender's appraiser.
Can I live in a flip to avoid tax?
If you live in it 2 of the last 5 years the §121 exclusion applies, but that is a residence, not a flip, and most lenders require owner occupancy for that long.
Related calculators
See all United States calculators → · All free online calculators
Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.
Ready to build your next digital solution?
Send the brief and you get a scoped response with approach, milestones and a fixed price range. Not a sales call.
A 30-minute call with the engineer who would run your project
Within 2 business daysA written scope: approach, module breakdown, milestones, fixed price range
Within 5 business daysYou decide. No retainer, no obligation, and the scope document is yours to keep either way
Your timelineSend your brief
Three fields to start. Add project details if you have them.