Fix and Flip ARV Calculator

Two ways to size a flip offer, and why the fuller one is more reliable

The 70 percent rule is the industry’s fast mental shortcut: pay no more than 70 percent of after-repair value, minus rehab cost, and the remaining margin is assumed to cover holding costs, selling costs and profit all at once. It is genuinely useful as a first screen against a listing, precisely because it takes seconds to calculate.

The fuller calculation this tool runs prices holding costs, selling costs and your target profit margin separately, using your actual project’s numbers rather than a single blended ratio. For a specific deal, this produces a maximum offer that reflects reality — a shorter holding period than typical allows paying more; a longer one, or higher financing costs, means paying less than the quick rule would suggest.

After-repair value is the number the entire deal depends on

Every other figure in a flip analysis is subtracted from ARV, which means an overestimated ARV inflates the maximum offer, the projected profit, and the entire justification for the deal simultaneously.

The discipline that protects against this: build ARV from genuinely comparable recent sales — matching square footage, bed and bath count, condition after your planned rehab, and proximity, ideally within the same subdivision or a very tight radius — rather than anchoring on the highest recent sale in the general neighborhood. A flip priced against an optimistic ARV can look profitable on paper right up until the appraisal or the actual sale comes in below projection, at which point every other number in the deal was built on a foundation that was never accurate.

Holding costs compound with every month the project runs long

Property tax, insurance, utilities, HOA dues where applicable, and loan interest if the purchase or rehab is financed all accrue monthly regardless of whether the project stays on schedule — and they are one of the most commonly underestimated line items in a flip budget.

Rehab projects run long more often than they run on time, for reasons ranging from permitting delays to contractor scheduling to unexpected scope discovered once walls are open. Budgeting a realistic holding period — and padding it rather than assuming the best case — protects the profit margin from the single most common way flip projects underperform their projections: simply taking longer than planned, with every additional month adding a full round of holding costs that were not in the original budget.

Selling costs are larger than many first-time flippers expect

Real estate commission, closing costs, and any seller concessions typically add up to a meaningful percentage of sale price — commonly in the high single digits to around 10 percent when everything is included.

Because these costs are calculated against the sale price rather than the purchase price, they scale with exactly the number the whole deal is trying to maximize, which means underestimating this percentage understates a real and unavoidable cost at the exact point in the deal where accuracy matters most — the moment the profit is actually realized.

Setting a target profit margin that reflects the real risk

A flip carries meaningfully more risk than a buy-and-hold rental — market timing risk on the sale, the concentration of an entire project’s return into a single transaction rather than spread across years of rental income, and the genuine possibility of unexpected rehab costs discovered mid-project.

Target profit margins in the range of 10 to 20 percent of after-repair value are common, with the specific number depending on project size, complexity, and how much uncertainty exists in the rehab scope. A smaller, simpler cosmetic flip with well-understood costs can reasonably target the lower end of that range; a larger project with structural work, permitting uncertainty, or an unfamiliar contractor relationship warrants pricing in more margin for the additional risk.

Why the maximum offer here is a ceiling, not a target

The number this calculator produces is the most you should pay to hit your target profit given your other assumptions — it is not a recommendation to offer that exact amount.

Negotiating below that ceiling directly increases your margin of safety against every risk already discussed: an ARV that comes in lower than projected, a rehab that runs over budget, a holding period that extends longer than planned, or a sale price that lands below the comparable sales used to build the original ARV estimate. Treating the calculated maximum as a starting point for negotiation, rather than the number to offer, is the difference between a comfortable margin and one that evaporates the moment any single assumption proves optimistic.

Estimating the rehab budget itself

This calculator takes rehab cost as an input, and getting that number right is its own significant exercise — the crew hours calculator helps translate a scope of work into labor cost, which is frequently the largest and least predictable component of any rehab budget.

For an investor considering holding the property as a rental instead of flipping it, the BRRRR calculator applies very similar after-repair-value discipline to a refinance-and-hold exit rather than a sale, and is worth running alongside this calculator before deciding which exit strategy actually fits a specific property.