Fix-and-Flip Calculator

How the fix-and-flip numbers work

• All-in cost = purchase price + rehab budget + purchase closing costs (estimated at 2%) + loan origination fee + holding interest. Selling costs are subtracted from the ARV when computing gross profit, not added to all-in.
• Gross profit = ARV − selling costs − all-in cost. A negative number means the deal loses money.
• Cash-on-cash ROI = gross profit ÷ cash required. Cash required is all-in cost minus the loan balance — the equity you must bring to the deal. This is your leveraged return on the cash you actually committed.
• Annualized CoC ROI scales the cash-on-cash return to a 12-month year, allowing you to compare flips with different hold periods on a common basis.
• 70% rule MAO = ARV × 0.70 − rehab cost. A quick screen for whether a deal is even worth underwriting. It is a rule of thumb, not a guarantee of profit; the full calculation is more precise.

Worked example

You buy a distressed property for $150,000, spend $40,000 on rehab, and expect to sell for $250,000. You take a $120,000 hard-money loan at 12% interest with 2 origination points and hold for 6 months. Purchase closing costs: $3,000. Origination fee: $2,400. Holding interest: $7,200. All-in cost: $202,600. Cash required: $82,600. Selling costs at 8%: $20,000. Gross profit: $27,400. Cash-on-cash ROI: 33.2%. Annualized: 66.4%. 70% rule MAO: $135,000 — your offer of $150,000 exceeds it, so the deal depends on soft costs staying low.

Frequently asked questions

What is the 70% rule and why does my offer exceed it?

The 70% rule says your maximum purchase price should be no more than 70% of ARV minus rehab cost. It leaves room for selling costs, financing costs and profit. It is a quick screen, not a hard cap. Some investors use 65% in slow markets or for large rehabs. If your offer exceeds the rule, run the full numbers to confirm you still hit your target ROI.

What selling costs should I use?

Total selling costs for a flip typically run 7–10% of the sale price. A 6% real-estate commission is standard in most markets; add 1–2% for transfer taxes, title insurance, seller concessions and closing costs. High-tax states (like New York) can push total costs to 10%+. The calculator defaults to 8%.

How is holding interest calculated?

Holding interest = loan balance × annual rate × (hold months ÷ 12). Hard-money loans are usually interest-only, so the full balance accrues interest every month. Some lenders charge a minimum term (e.g., 3 months), which is not modelled here.

Should I use cash-on-cash ROI or total ROI?

Cash-on-cash ROI measures your return on the equity you put in — it reflects leverage. Total (unlevered) ROI measures return on the full capital invested regardless of financing. Cash-on-cash is higher when leverage is working in your favour, and lower (or more negative) when the deal goes badly. Compare deals on the same basis; mix them and the numbers mislead.

Formulas last reviewed October 3, 2026. Results are estimates for educational use; not financial advice. Methodology →