Project profit, ROI, and annualized return on a fix-and-flip deal
The most common mistake in flipping is underestimating costs. Experienced flippers use the 70% rule: never pay more than 70% of ARV minus rehab costs. For this calculator, that means Purchase + Rehab should stay under 70% of your ARV.
Holding costs include property taxes, insurance, utilities, lawn care, and any loan payments during the rehab period. These add up quickly — a 2-month delay can easily eat $5,000–$10,000 in profit.
Selling costs typically run 6–8% of the sale price: 5–6% agent commissions plus 1–2% in closing costs, transfer taxes, and concessions.
Annualized return is the most useful comparison metric. A 15% ROI over 4 months (45% annualized) is far better than 25% over 12 months. Speed matters in flipping — time is your biggest expense.