How to read this result
In the default example, selling costs is $32,000.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Add purchase, rehab, acquisition, holding and financing costs before sale. Selling costs are a percentage of sale price. Subtract all costs from sale price for net profit; divide profit by pre-sale capital for ROI. Break-even sale price accounts for the sale-price-dependent fee.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Purchase price (USD)
- Purchase price. Minimum: 0.
- Rehab cost (USD)
- User-entered rehab cost. Minimum: 0.
- Buying costs (USD)
- Acquisition closing costs. Minimum: 0.
- Holding costs (USD)
- Property carrying costs. Minimum: 0.
- Financing costs (USD)
- Interest and financing fees entered by user. Minimum: 0.
- Expected sale price (USD)
- Expected resale price. Minimum: 0.
- Selling cost rate (%)
- Commission plus other selling cost assumption. Minimum: 0. Maximum: 99.9.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Purchase price | $250,000.00 |
| Rehab cost | $60,000.00 |
| Buying costs | $5,000.00 |
| Holding costs | $15,000.00 |
| Financing costs | $12,000.00 |
| Expected sale price | $400,000.00 |
| Selling cost rate | 8.00% |
| Item | Default scenario |
|---|---|
| Selling costs | $32,000.00 |
| Total project cost | $374,000.00 |
| Net profit | $26,000.00 |
| ROI on pre-sale capital | 7.60% |
| Break-even sale price | $371,739.13 |
Assumptions and limitations
Does not estimate construction quantities or guarantee ARV/sale price. Taxes are excluded unless user includes them in costs.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
Do not add a dollar selling fee again if it is already in the selling-cost percentage. Costs paid before closing still reduce project profit.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- Office of the Comptroller of the Currency — Comptroller's Handbook — Commercial Real Estate LendingNOI, direct capitalization, cap-rate valuation and DCF concepts for commercial real estate.
Frequently asked questions
Which capital is used for flip ROI?
The denominator is purchase plus rehab, buying, holding and financing costs before sale. It is not leveraged cash-on-cash or an annualized return.
Why is break-even price more than pre-sale cost?
The selling-cost percentage applies to the break-even price itself. Dividing pre-sale cost by one minus that percentage accounts for this cost.