How to Calculate Fix-and-Flip Profit
The fix-and-flip analysis has five core numbers. Get any one wrong and the deal collapses. Here's how to run the math correctly:
1
After Repair Value (ARV) — What will the property sell for after renovations? Talk to a local agent or run comparable sales (comps) on Zillow. Estimate conservatively at 90% of ARV for sale price.
2
Renovation Budget — Get bids from at least 3 contractors. Add a 15-20% contingency. Never trust the seller's "moderate rehab" estimate.
3
Purchase Price + Closing Costs — Typical closing costs are 2-3% of purchase price on the buy side. Factor in transfer taxes and title insurance too.
4
Holding Costs — Mortgage, taxes, insurance, and utilities while you hold the property. Most flips take 4-6 months. Calculate 6 months as your baseline.
5
Sale Closing Costs — Real estate agent commissions (5-6%), transfer taxes, and seller closing costs. Budget 8-10% of the sale price total.
The Fix-and-Flip Profit Formula
Once you have all five numbers, here's the profit calculation:
Fix-and-Flip Rule of Thumb: The 70% Rule
Experienced flippers use the 70% rule as a quick screening tool:
- Max Purchase Price = ARV × 70% − Renovation Costs
- This builds in a 30% margin for holding costs, selling costs, and unexpected overruns
- If you can't meet the 70% rule at the listed price, pass — unless you have a specific competitive advantage
Need a Deal Analyzer Spreadsheet?
If you prefer to model deals in Excel, QuikCalc's Fix-and-Flip Analyzer template includes the 70% rule calculation, ARV estimator, and profit margin tracker — compatible with Google Sheets.
Get Stessa Free →What QuikCalc's Fix-and-Flip Calculator Does
Our free fix-and-flip calculator walks you through every step of the analysis:
- Max Allowable Offer (MAO) — calculates the most you should pay based on ARV and renovation budget
- Projected Profit — based on your actual numbers, not rule-of-thumb estimates
- Holding Cost Projections — monthly breakdown for accurate cash flow planning
- ARV Sensitivity — see how your profit changes if ARV is 5-10% lower than expected