Analyze fix-and-flip profitability. Calculate net profit, ROI, and the 70% rule maximum purchase price.
9.0% ROI
| Purchase Price | $200,000 |
| Rehab Costs | $40,000 |
| Holding Costs | $9,000 |
| Selling Costs | $33,600 |
| Financing Costs | $8,000 |
| Total Costs | $293,600 |
| Sale Price (ARV) | $320,000 |
| Net Profit | $26,400 |
| ROI | 9.0% |
| 70% Rule Max Buy Price | $184,000 |
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Net Profit = ARV − Total Costs
Total Costs = Purchase + Rehab + Holding + Closing + Selling + Financing
70% Rule: Max Price = ARV × 0.70 − Rehab Costs
The 70% rule: Maximum purchase price = (ARV × 70%) − Rehab Costs. If ARV is $300,000 and rehab is $40,000, don't pay more than $170,000 ($300k × 0.70 − $40k).
Successful flippers average $67,000 gross profit per flip, but after all costs, net profit is typically $20,000–$40,000. Experienced flippers in hot markets can net $50,000–$100,000.
Holding costs are ongoing expenses while you own the property: property tax, insurance, utilities, loan interest, and HOA fees. They run $1,000–$3,000/month and significantly eat into profits on slow flips.
Average flip takes 6 months total: 1–2 months to close, 2–3 months to renovate, 1–2 months to sell. Faster flips preserve more profit. Budget holding costs for at least 6 months.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.