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This fix and flip calculator is designed to help real estate investors evaluate their project costs, cash requirements, and profits for fix and flip investments. The calculator accounts for purchase and renovation costs, loan costs, property title costs, and sales and marketing costs to produce the expected profit of a fix and flip.

Understanding The Fix and Flip Calculator

The calculations in the fix and flip calculator are broken down into four categories: Deal Economics, Loan Economics, Title Economics, and Sales & Marketing Economics. Each of the four categories must be considered to accurately calculate the profit of a fix and flip project.

Deal Economics

The deal economics section considers the purchase price, renovation costs, after repair value (ARV), and the time to complete the project. In the deal economics section, it is important for real estate investors to assume a conservative ARV and a conservative project completion time. If the fix and flip takes longer to complete than originally expected or the property's after repair value is less than originally expected, the profit margin will be reduced. Make sure to run an upside, downside, and middle ground scenario.

Loan Economics

The loan economics section considers the costs associated with borrowing funds to finance the acquisition and renovation of the property. In this section, you can adjust how much you intend to borrow for the acquisition and the renovation.

If you’re looking for a loan to finance a fix and flip project or you’d like to be pre-approved so you can find your next deal, you can get approved online with Ridge Street Capital here.

Title Economics

When you purchase or sell a property, there are costs associated with transfer the ownership of the property from one party to another. The costs associated with this transfer of property are accounted for in the Title Economics section. These costs vary by county, but typically do not exceed 1-2% of the purchase or sale price.

Sale and Marketing Economics

The Sales and Marketing Economics section considers the costs associated with selling the property. If you are using a real estate agent, you should account for their sales commission when selling the property. In most states, sellers are also required to cover the costs of the buyer’s real estate agent. Lastly, you can also consider staging costs which typically range from $2,500 to $3,500 depending on the size of the property.

Total Cash Invested At Closing

Of course, as an investor you need to know how much cash you’ll bring to the table. Your cash to close will vary depending on the leverage of your loan, interest rate, fees, and closing costs. You’ll notice that even if you had 100% financing, you would still have a “Cash to Close Balance” to cover the fees and closing costs associated with your fix and flip.

Total Cash Invested

Your total cash invested includes your cash to close plus any interest payments before you’ve successfully sold the property and paid off your loan.

Total Profit

Total profit is calculated using the formula below:

Profit = Sale Price - Total Cash Invested - Sales and Marketing Costs

Return On Investment (ROI)

The ROI of the project is calculated by dividing the Profit by the Total Cash Invested.

ROI (%) = (Profit / Total Cash Invested) x 100 (%)

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Fix and Flip Calculation Case Study

This case study summarizes the fix and flip investment analysis using the Fix and Flip Calculator of a project financed by Ridge Street Capital.

The property was a 3 bed, 2 bath single family home purchased for $201,000, it required $42,450 worth of rehab, and had an estimated After Repair Value (ARV) of $325,000. The projects was expected to be flipped in 8 months by a local realtor and investor in the area. The real estate investor received a loan with an 82.5% initial advance and 90% of the rehab budget at 11.25% and 3% closing costs.

Below is the investment analysis of the project:

The project showed a clear path to success for the real estate investor and financing was closed within 14 days.

About Ridge Street Capital

Ridge Street Capital is an investment property lending firm (hard money lender) that finances fix and flips, rental properties, and ground up construction projects in 35 States across the U.S.

If you’re looking for financing on your next project, you’d like to be pre-approved, or you’d like to schedule a call with the lending team, we’re happy to help.

Get A Term Sheet | Get Pre-Approved | Schedule A Call

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