Fix and Flip Profit Calculator: A Step-by-Step Walkthrough

What inputs does a flip profit calculator need?

Axelrad's fix-and-flip page has an interactive calculator with these same inputs. This post walks through the math by hand so you know what each line means.

The calculator asks for: purchase price, after-repair value, rehab budget, closing costs, down payment %, rehab financed %, interest rate, points, months held, monthly holding cost (taxes, insurance, utilities), selling costs as a % of ARV, and other selling costs. That list is a good checklist on its own. If you can't fill a field with a sourced number, you're not ready to make an offer.

Worked example, line by line

Example (hypothetical numbers; rates and points are placeholders, not quotes and not Axelrad terms):

Step 1: Loan amount. Purchase financed: $240,000 x 85% = $204,000. Rehab financed: $55,000. Total loan: $259,000. Check the ARV cap: $259,000 / $380,000 = 68%. Inside a hypothetical 70% or 75% cap.

Step 2: Loan costs. Points: $259,000 x 2% = $5,180. Interest (simplified as fully drawn for the whole hold): $259,000 x 11% / 12 x 7 = $16,619. If your loan charges interest only on funds drawn, the real number would be lower.

Step 3: Holding costs. $750 x 7 = $5,250.

Step 4: Selling costs. $380,000 x 7% = $26,600, plus $2,000 = $28,600.

Step 5: Total cost.

Step 6: Net profit. $380,000 - $356,649 = $23,351 before taxes.

Step 7: Cash in the deal. Down payment $36,000 + closing $6,000 + points $5,180 + interest $16,619 + holding $5,250 = $69,049.

Step 8: Return on cash. $23,351 / $69,049 = about 34% over seven months.

How sensitive is profit to sale price and time?

Same example, changing one thing at a time.

A 5% softer sale plus a three-month delay turns this deal into a loss. That's normal for flips, which is why your inputs need to be sourced and stress-tested.

What is your break-even sale price?

Break-even sale price = (all costs except selling costs + other selling costs) / (1 - selling cost %).

In the example: ($356,649 - $28,600 + $2,000) / (1 - 0.07) = $330,049 / 0.93 = about $354,891. Any sale below that loses money. Compare it with your lowest credible comp.

Blank calculator (fill in)

Enter your own numbers below and the calculator returns net profit, cash in the deal and return on cash, as estimates only. Then run the break-even formula from the previous section: (all costs except selling costs + other selling costs) / (1 - selling cost %).

Which inputs should you double-check first?

Not every input carries the same weight. In the example, a 5% change in sale price moved profit by about $17,700, while a 15% rehab overrun moved it by about $8,900. So spend your verification time in this order:

1. ARV. It drives both the sale proceeds and the selling costs. Check it with closed, similar, renovated comps.
2. Months held. Every extra month adds interest and holding costs. Build your timeline phase by phase, including the buyer's closing period.
3. Rehab budget. Back major lines with written bids and keep a separate contingency.
4. Selling costs. Commission structures and seller concessions vary by market; ask a local agent.
5. Loan terms. Use the rate, points, and fees from an actual term sheet, not a guess. Ask whether interest is charged on the full loan or only on drawn funds.

How does draw-based interest change the result?

The worked example simplified interest by assuming the full loan was outstanding for all seven months. On a loan where rehab money is released in draws and interest is charged only on funds drawn, interest would be lower in the early months. To model it, list the outstanding balance for each month, multiply each by the monthly rate, and add them up. The difference can be meaningful on a large rehab with late draws, and it's money that stays in your profit.

What does the calculator not capture?

Taxes on your profit, the value of your own time, and the cost of tying up cash that could be in another deal. Talk to a tax professional about how flip profits are taxed in your situation, and decide whether you'll count your time as a cost before you compare projects.

What's a good profit on a flip?

There's no universal number. Many investors set a minimum dollar profit and a minimum return on cash before they'll take on a project, scaled to its size and risk. A heavy rehab deserves a bigger cushion than a light one. Decide your minimum before you look at a deal, so you don't talk yourself into a thin one.

Key takeaways

• Profit = sale price minus every cost: purchase, rehab, closing, loan, holding, selling.
• Return on cash measures profit against the money you actually put in.
• Small changes in sale price and time move profit a lot; stress-test both.
• Know your break-even sale price before you buy.

Run it, then send it

Plug your numbers into the calculator on the fix-and-flip loan page. If the deal survives your stress test, submit it.