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How much do house flippers make?
Flip profit is what is left after every cost. Here is how to calculate it before you buy, using a Dallas example.
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Estimate only. Loan amount is the lower of 100% of purchase plus rehab or 70% of the sale price when finished (after-repair value). Minimum loan $150,000. Business-purpose loans on investment property.
The profit formula
Profit = sale price − purchase price − rehab − buying costs − holding costs − financing costs − selling costs.
Selling costs, mainly agent commissions and title fees, are often the biggest number new flippers forget.
A Dallas example
| Item | Amount |
|---|---|
| Sale price | $360,000 |
| Purchase price | −$180,000 |
| Rehab | −$60,000 |
| Buying costs | −$5,000 |
| Holding costs (taxes, insurance, utilities) | −$8,000 |
| Selling costs | −$25,000 |
| Profit before financing | $82,000 |
Subtract your loan's interest and fees for the months you hold the house to get your final profit. With 100% financing, that profit comes with little or none of your own money in the purchase and rehab.
This is an illustrative example, not a typical result.
How to protect your profit
- Buy under the 70% rule
- Add a contingency to your rehab budget
- Keep the timeline short to cut holding costs
- Price the finished house to sell fast
Run your numbers in the hard money loan calculator.
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Questions investors ask
Straight answers about house flipping profit.
What is a good profit on a flip?
It depends on the deal and the risk, but buying under the 70% rule leaves room for costs and profit.
What costs do new flippers forget?
Selling costs, holding costs and a rehab contingency.
How much of a Dallas flip will you fund?
100% of the purchase price and 100% of the rehab budget, as long as the total loan is no more than 70% of the after-repair value.
What is the smallest loan you make?
Loans start at $150,000.
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