🏘️ Fix-and-Flip Calculator
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Calculates fix-and-flip profitability using the 70% Rule: Never pay more than 70% of ARV (After Repair Value) minus rehab costs. Formula: Max Offer = (ARV × 0.70) - Rehab. This ensures 15-20% profit margin after all costs including purchase, renovations, holding costs (mortgage, taxes, insurance during flip), closing costs, and realtor fees (6%).
The calculator compares your purchase price to the 70% rule maximum and calculates ROI (Return on Investment). Good flips target 15-25% ROI. Under 10% isn't worth the risk. Profit = ARV - (Purchase + Rehab + Holding + Selling Costs).
ARV: $280,000 | Purchase: $200,000 | Rehab: $40,000 | Holding: $12,000 (6 months) | Selling: $22,400 (8%)
Total Cost: $274,400 | Profit: $5,600 | ROI: 2% (Too thin!)
70% Rule Check: ($280k × 0.70) - $40k = $156k maximum offer. You paid $200k = $44k over 70% rule. This flip barely breaks even. Should have offered $156k maximum to achieve 15%+ ROI.
Holding costs are monthly carrying expenses during renovation: mortgage interest, property taxes, insurance, utilities, HOA fees if applicable. Calculate: (Monthly expenses × renovation months). A $200k loan at 8% = $1,333/month interest. Add $300 taxes + $100 insurance + $150 utilities = $1,883/month. 6-month flip = $11,298 holding costs. Faster flips save thousands.
The 70% rule was designed for typical markets with 8% selling costs. In hot markets with low inventory, you might stretch to 75-80% rule and still profit. In slow markets, stick to 65-70%. The rule protects against: ARV overestimation (happens frequently), unexpected repair costs (always happen), market downturns during flip, and buyer negotiations. Better to miss a marginal deal than lose $30k on a bad flip.