House Flipping Calculator: Estimate Net Profit Before You Buy, With Every Cost Your Bookkeeping Will Count

What does a house flipping calculator work out?

A house flipping calculator estimates net profit before you buy. It takes the purchase price, the rehab budget, the resale value, how long you will hold it and your selling costs, then subtracts every cost from the sale price.

The results come in the same cost groups as our per-deal report: closing and loan costs at purchase, rehab, holding costs, selling costs and net profit. Flipper Bookkeeping clients receive that report every month. Because the words match, you can compare the estimate with the actual result line by line once the deal closes.

What numbers do you need before you can use a flip calculator?

You need 7: the purchase price, the closing and loan costs at purchase, the rehab budget, the after repair value, the months you expect to hold it, your monthly holding cost, and selling costs as a percentage of the sale price.

• Purchase price: what you will pay for the property.
• Closing and loan costs at purchase: escrow, title and other closing costs when you buy, plus loan points and lender fees.
• Rehab budget: everything the work will cost.
• After repair value (ARV): the price you expect to sell at once the work is done.
• Months held: from the day you buy to the day the sale closes.
• Monthly holding cost: loan interest, property tax, insurance, utilities and HOA dues for 1 month.
• Selling costs: agent commission, escrow, transfer tax and staging, as a percentage of the sale price.

Return on cash in needs 1 more number: your down payment. That is the part of the purchase price the lender does not fund.

How is net profit on a flip calculated?

Net profit is the sale price minus the purchase price, minus the closing and loan costs at purchase, minus the rehab, minus holding costs, minus selling costs. Holding costs are the monthly cost times the months held, so time is a cost like any other.

Written out: sale price, minus purchase price, minus closing and loan costs, minus rehab, minus holding costs, minus selling costs, equals net profit. Here is Project 1 after it sold, with the actual costs from its sample ledger, to the cent.

We follow the same property through buy, rehab, hold and sell in the house flipping bookkeeping guide.

What is return on cash in on a flip, and why not return on the purchase price?

Return on cash in is net profit divided by your own money in the deal: the down payment, the closing and loan costs at purchase, and holding costs. The lender funds the rehab, so rehab money is not your cash.

On Project 1 the down payment was $42,800, closing and loan costs were $7,964.00 and holding costs were $13,819.07, so the owner's own cash in was $64,583.07. The net profit of $22,576.43 reads very differently against the 2 bases.

Return on cash in measures what your own money earned. The lender's money is not counted as yours.

What do holding costs do to a flip?

They turn time into money. A flip held 216 days instead of 135 can lose what it would have made, because interest, insurance, utilities and property tax keep running whether the work is moving or not.

Project 4, 2200 Test Ct, Rancho Cordova, sat 216 days. Before holding costs it cleared $25,182.80. Holding costs of $31,652.31 took it to a loss.

Months held is an input in the calculator for this reason. Change it and holding costs move with it. In our experience, the flippers who know what every deal really made make better decisions on the next one.

Why is the estimate not the same as what the deal actually made?

4 things move it: the rehab runs over, the sale price lands under the estimate, the hold runs longer than planned, and closing costs arrive in full. The estimate is a plan, the books are the record.

• The rehab runs over. In the sample report, Project 7 ran 31% over budget: $72,050 spent against $55,000.
• The sale price lands under the after repair value you entered.
• The hold runs longer than planned, and every extra month adds a month of holding costs.
• Closing costs arrive in full. Loan points and closing costs at purchase are easy to leave out, which is why they have their own input.

This calculator estimates before you buy. The reconciled result after the sale is a different number. Our guide to house flip profit explains it.

How do I check the estimate against the real numbers later?

Keep the estimate. When the deal closes, compare it with the per-deal report line by line, using the same 4 cost groups. The gap between them is what to fix on the next deal.

1. 1Before you buy, write down each line of the estimate and its return on cash in.
2. 2When the deal closes, find the property on your per-deal report.
3. 3Compare each line. The line with the biggest gap is the one to plan differently on the next deal.

Here is Project 1 both ways: the calculator's opening estimate, and the actual result from the report.

The sale price and purchase price matched. The cost differences add to exactly $3,344.57. The rehab is the line to plan differently next time.

The estimate uses the same cost groups as the monthly report, so the 2 sit side by side. See them on our real estate bookkeeping report example, with every line explained.