Flip Profit Calculator Formula

Understand the math behind the flip profit calculator. Each variable explained with a worked example.

Use the Flip Profit Calculator

Formulas Used

Net Profit

profit = net_profit

Return on Investment

roi = total_cost > 0 ? (net_profit / total_cost) * 100 : 0

Total Project Cost

total_project_cost = total_cost

Total Holding Costs

holding_expense = total_holding

Total Selling Costs

selling_expense = commission + closing

Profit Per Month

profit_per_month = holding_months > 0 ? net_profit / holding_months : 0

Variables

VariableDescriptionDefault
purchase_pricePurchase Price(USD)180000
rehab_costTotal Rehab Cost(USD)40000
holding_monthsHolding Period (months)5
monthly_holding_costMonthly Holding Cost(USD)1500
sale_priceExpected Sale Price(USD)310000
agent_commission_pctAgent Commission(%)5
closing_costs_pctClosing Costs (Buyer + Seller)(%)3
total_holdingDerived value= holding_months * monthly_holding_costcalculated
commissionDerived value= sale_price * agent_commission_pct / 100calculated
closingDerived value= sale_price * closing_costs_pct / 100calculated
total_costDerived value= purchase_price + rehab_cost + total_holding + commission + closingcalculated
net_profitDerived value= sale_price - total_costcalculated

How It Works

House Flip Profit Analysis

Flipping a property involves buying below market value, renovating, and selling for a profit. Accurate cost accounting is critical because hidden costs erode margins quickly.

Formula

Net Profit = Sale Price - Purchase Price - Rehab Cost - Holding Costs - Selling Costs

Cost Components

  • Rehab: Materials, labor, permits, contingency (add 10-15% buffer)
  • Holding: Mortgage payments, property taxes, insurance, utilities during renovation
  • Selling: Agent commissions (5-6%), closing costs (2-3%), transfer taxes

    • Profit Targets

  • Most successful flippers target 15-20% return on total investment
  • Profit per month of hold time matters because time is capital tied up
  • A $20,000 profit in 3 months is better than $40,000 in 12 months on a per-month basis

    • Worked Example

    Buy at $180,000, rehab for $40,000, hold 5 months at $1,500/month, sell at $310,000 with 5% commission and 3% closing costs.

    purchase_price = 180000rehab_cost = 40000holding_months = 5monthly_holding_cost = 1500sale_price = 310000agent_commission_pct = 5closing_costs_pct = 3
    1. 01Holding costs: 5 x $1,500 = $7,500
    2. 02Commission: $310,000 x 5% = $15,500
    3. 03Closing costs: $310,000 x 3% = $9,300
    4. 04Total project cost: $180,000 + $40,000 + $7,500 + $15,500 + $9,300 = $252,300
    5. 05Net profit: $310,000 - $252,300 = $57,700
    6. 06ROI: $57,700 / $252,300 = 22.9%
    7. 07Profit per month: $57,700 / 5 = $11,540

    Ready to run the numbers?

    Open Flip Profit Calculator