Purpose and steps
Net profit = sale price − purchase, buying costs, rehab plus contingency, holding costs, agent commission, and sale closing costs. Break-even sale price solves those costs including the commission percentage. The calculation runs locally and keeps cash-flow timing consistent with the stated assumptions.
- Confirm currency and monthly versus annual amounts. U.S. tax and loan models should be used within their stated scope.
- Prepare Purchase price, Purchase closing costs, Property area, Estimated after-repair value, Rehab budget, Holding period, Monthly holding costs, Expected sale price, Agent commission, Sale closing costs, Rehab contingency. Defaults demonstrate the model rather than your personal circumstances.
- Check the headline result and its components. A key interpretation for this tool is: ROI divides modeled profit by cash committed before sale.
- Compare the baseline with a changed scenario: The 70% rule is only a screening benchmark: 70% of ARV minus rehab, not a valuation or offer recommendation.
Input reference and units
These values reproduce the model’s demonstration. Replace them with your own records or measurements; they are not recommended targets.
On a small screen, swipe the table horizontally to see all columns.
| Parameter | Demonstration value | How to enter it |
|---|---|---|
| Purchase price | 180000 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Purchase closing costs | 4500 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Property area | 1800 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Estimated after-repair value | 290000 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Rehab budget | 45000 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Holding period | 6 months | Use months, not years. Five years means 60 months. |
| Monthly holding costs | 1600 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Expected sale price | 300000 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Agent commission | 6 % | Enter a percentage such as 6.5, not 0.065. The equation converts it to a decimal. |
| Sale closing costs | 3000 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Rehab contingency | 10 % | Enter a percentage such as 6.5, not 0.065. The equation converts it to a decimal. |
Model-specific method
How this calculator produces its result
Net profit = sale price − purchase, buying costs, rehab plus contingency, holding costs, agent commission, and sale closing costs. Break-even sale price solves those costs including the commission percentage.
A cash-flow waterfall and scenario sensitivity
Income and costs form successive layers. Subtracting financing before computing NOI changes the definition and distorts cap-rate comparisons. Principal repayment uses cash but can also build equity, so a tax profit, operating profit and cash-flow result may legitimately differ.
Sensitivity analysis changes one assumption while keeping the others fixed. If yearly potential rent is G, a one-percentage-point vacancy increase directly reduces collected rent by G×0.01, before variable expense offsets. Combined stress scenarios are also important: vacancy, maintenance and borrowing costs can worsen together.
Effective income = potential income × (1 − vacancy) NOI = effective income − operating expenses Cash flow = NOI − debt service DSCR = NOI / debt service
- Potential income: before vacancy or collection loss
- NOI: net operating income before financing
- Debt service: contractual principal and interest payments
- Cash flow: money remaining after the modeled payments
Worked example
$45,000 rehab with a 10% contingency budgets $49,500. Holding six months at $1,600 adds another $9,600 before selling costs.
Reproduce the default scenario
This is a separate example, calculated using the exact engine on the tool page and the defaults in the input reference above. Health examples use metric units. Displayed rounding may differ from intermediate precision.
- Estimated net flip profit
- 35,400 USD
- Total project cost
- 264,600 USD
- Rehab including contingency
- 49,500 USD
- Holding costs
- 9,600 USD
- Selling costs
- 21,000 USD
- Estimated cash invested before sale
- 243,600 USD
- Return on invested cash
- 14.53%
- Profit per square foot
- 19.67 USD
- Break-even sale price
- 262,340.43 USD
- 70% rule maximum purchase price
- 153,500 USD
- Purchase price / ARV
- 62.07%
Reading results without overstating them
- ROI divides modeled profit by cash committed before sale.
- The 70% rule is only a screening benchmark: 70% of ARV minus rehab, not a valuation or offer recommendation.
Assumptions and exclusions
- Excludes financing interest unless entered in monthly holding cost, acquisition taxes not entered as closing costs, permit surprises, schedule delays, income/capital-gains tax, price changes, and contractor risk.
Sources and content notes
Toolify describes the implemented algorithm and its assumptions. Sources below support the topic or applicable rules; they do not endorse this calculator. Examples are illustrative, and published rules take precedence over simplified estimates.
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