Strategy
Fix and Flip Calculator
Estimate rehab costs, holding costs, and projected profit on a flip.
Deal breakdown
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How rental property returns work
Fix and flip is a short-term strategy: buy a distressed property, renovate it, then sell it for a profit. The math is straightforward but unforgiving — every cost you overlook comes straight out of your profit. The key is to estimate every line item before you buy, not after. The total cash invested includes the purchase price, rehab cost, buying closing costs, holding costs during the renovation, and financing cost (points and interest). If any of these are wrong, your profit shrinks. Holding costs are the expenses of owning the property while you renovate — interest payments, property taxes, insurance, utilities, and maintenance. They accrue monthly, so the longer your rehab takes, the more they add up. The calculator multiplies your monthly holding cost by the number of holding months to get total holding cost. Selling costs are paid when you exit the deal — agent commissions, transfer taxes, and closing fees. They are typically 6–10% of the resale price. The calculator applies your selling cost percentage to the resale price (ARV) to get total selling costs. Your net profit = resale price − selling costs − total cash invested. The ROI compares that profit to your total cash invested as a percentage. Because a flip is a short-term investment, the calculator also shows an annualized ROI — your ROI scaled to a 12-month basis — so you can compare a 4-month flip to other investments on equal footing. A profitable flip usually requires buying below market and renovating efficiently. If your projected ROI is under 15%, the deal is marginal — one cost overrun or a slower sale can erase your profit. Use this calculator to stress-test your numbers before you commit, and always include a contingency in your rehab budget for the surprises you will inevitably find.
Worked example
You buy a property for $140,000 that needs $35,000 in rehab. Buying closing costs are $3,500. You expect the renovation to take 5 months with monthly holding costs of $900, and your financing cost (points plus interest) is $6,000. You plan to sell at $235,000 with selling costs of 8%.
Holding cost = 5 × $900 = $4,500. Selling costs = $235,000 × 0.08 = $18,800. Total cash invested = $140,000 + $35,000 + $3,500 + $4,500 + $6,000 = $189,000.
Net profit = $235,000 − $18,800 − $189,000 = $27,200. ROI = $27,200 / $189,000 × 100 = 14.4%. Annualized ROI = 14.4% × 12 / 5 = 34.6%. The deal is profitable, but the ROI is borderline — a $5,000 cost overrun would cut your profit to $22,200 and your ROI to 11.7%. Build a contingency into your rehab budget.
Frequently asked questions
What is a good ROI for a fix and flip?
Many investors target a project ROI of 15–25% or higher. Because a flip ties up capital for only a few months, the annualized ROI is often much higher. If your projected ROI is under 15%, the deal is marginal — one cost overrun or a slower sale can erase your profit. Always stress-test your numbers before buying.
What costs should I include in total cash invested?
Total cash invested includes the purchase price, rehab cost, buying closing costs (title, inspection, loan fees), holding costs during renovation (interest, taxes, insurance, utilities), and financing cost (points and interest). Every dollar you spend before the sale counts against your profit.
How much should I budget for selling costs?
Selling costs typically run 6–10% of the resale price, with 8% being a common estimate. That includes agent commissions (often 5–6% combined), transfer taxes, title, and closing fees. If you sell without an agent, your costs will be lower, but you should still budget for title and closing.
What is annualized ROI and why does it matter?
Annualized ROI scales your project return to a 12-month basis so you can compare a short flip to other investments. A 15% ROI over 4 months annualizes to 45%, while the same 15% over 10 months annualizes to 18%. It helps you judge whether your capital is working hard enough given the time the deal takes.
How do I estimate holding costs?
Add up the monthly expenses of owning the property during renovation: loan interest, property taxes, insurance, utilities, and maintenance. Multiply by the number of months you expect the rehab to take. Always pad your timeline — delays are common, and every extra month adds to your holding cost.