House Flipping Profit Calculator (70% Rule)
The 70% rule is a quick screen for flips: pay no more than 70% of the after repair value minus repairs. This runs the rule and the full profit math side by side, with buying, holding and selling costs, so you can see when a deal passes the rule but still earns little.
Results
How it works
Maximum offer = ARV x 70% - repairs, an investor rule of thumb, not a law. Profit = ARV - purchase - repairs - holding - buying costs - selling costs. Return = profit / cash in before the sale (purchase, repairs, holding and buying costs).
Source
FAQ
Is the 70% rule official?
No. It is an investor rule of thumb. Use the full profit line for real decisions.
What goes in holding costs?
Loan interest, property tax, insurance and utilities for the months you own it.
How is flip profit taxed?
A home held one year or less is a short-term gain taxed at ordinary income rates (IRS Topic 409). If flipping is your business, the IRS can treat the homes as inventory and the profit as business income subject to self-employment tax. Talk to a tax professional.
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Estimates, not tax or financial advice. Check important numbers with a qualified professional.