Real Estate & Investing
Flip Profit / ARV Calculator
Work out what a flip returns once the purchase, rehab budget, carrying costs, and sale costs are subtracted from the after-repair value.
Calculation inputs
Enter the purchase, rehab, and resale assumptions for the project.
Results
No result yet
Complete the fields and select Calculate to show results here.
About this calculator
This calculator estimates the net profit and return on investment for a fix-and-flip project by subtracting purchase price, rehab budget, holding costs, and selling costs from the expected after-repair value. It is designed for investors evaluating whether a flip's numbers justify the purchase before closing on a property.
How the calculation works
- Total investment = purchase price + rehab budget + (monthly holding costs × months)
- Selling costs = ARV × selling costs %
- Net profit = ARV − (total investment + selling costs)
- ROI % = (net profit ÷ total investment) × 100
Notes and assumptions
The ARV should come from recent comparable sales of renovated homes in the same area, not from list prices.
Longer timelines quietly erode profit through carrying costs, so test a pessimistic holding period as well.
How it works in plain English
Total investment combines the purchase price, the rehab budget, and total holding costs, which are the monthly holding cost multiplied by the number of months the project is expected to take. Holding costs generally include loan interest, taxes, insurance, and utilities during the renovation and marketing period.
Selling costs are calculated as a percentage of the after-repair value (ARV), covering items like real estate commissions and closing costs. Net profit is the ARV minus total investment minus selling costs, and ROI expresses that profit as a percentage of the total invested.
The calculator also reports profit per month held, which highlights how a longer timeline can quietly erode the return even when the final profit figure looks acceptable. Running the numbers with a slower, more conservative timeline is a useful stress test before committing to a purchase.
Because ARV projections and rehab estimates are always somewhat uncertain at the offer stage, many investors run the numbers twice: once with the expected figures and again with a lower ARV or higher rehab cost, to see how much margin for error the deal actually has before committing capital.
The formula
- Total investment = purchase price + rehab budget + (monthly holding costs x months)
- Selling costs = ARV x selling costs %
- Net profit = ARV - (total investment + selling costs)
- ROI % = (net profit / total investment) x 100
Worked example
An investor buys a house for $180,000, budgets $45,000 for rehab, and expects a five-month project with $1,200 in monthly holding costs, adding $6,000. Total investment comes to $231,000.
The after-repair value is estimated at $290,000, and selling costs at 8% of ARV total $23,200. Net profit is $290,000 minus $231,000 minus $23,200, which equals $35,800. ROI is $35,800 divided by $231,000, or about 15.5%, and profit per month held works out to $7,160. That monthly figure helps compare this project against a shorter or longer flip with a similar total profit, since tying up capital for twice as long effectively earns half as much per month. Profit as a share of ARV is about 12.3%, within the range many flippers use as a minimum threshold before moving forward with a purchase.
Frequently asked questions
Where should the ARV number come from?
ARV should be based on recent closed sales of comparable, fully renovated homes in the immediate area, not on list prices or the seller's opinion of value. Overestimating ARV is one of the most common ways flip projections turn out to be too optimistic once the property actually goes to market.
What if the project takes longer than planned?
Extending the holding period increases total holding costs and reduces net profit and ROI, even if nothing else changes. Re-running the calculator with a longer, more pessimistic timeline shows how sensitive the deal is to delays from permitting, contractor scheduling, or a slower sale.
Should financing costs be included in holding costs?
Yes, if the purchase or rehab is financed, loan interest during the hold should be added into the monthly holding cost figure. Leaving financing costs out will overstate the project's true profitability, especially on longer flips or higher-rate loans.
What counts as selling costs on a flip?
Selling costs typically include real estate agent commissions, title and closing fees, transfer taxes, and any seller concessions offered to the buyer. The calculator applies a single percentage to the ARV to approximate all of these combined, which is common practice for early-stage deal analysis.
Is a positive ROI enough to justify a flip?
A positive ROI is a starting point, but it should be weighed against the time, effort, and risk involved, along with how the return compares to other available investments. Many investors set a minimum ROI or minimum dollar profit threshold before considering a flip worth pursuing.
Related tools
Total a renovation scope line by line with contingency.
Calculate principal, interest, taxes, insurance, and PMI.
Compare a new loan against the current one and find break-even.
Estimate the shortfall left after a short sale closes.