TOOLS / FLIP RETURN
Flip profit and return
Purchase, rehab, holding, financing and selling costs down to profit, return on cost, and annualised return.
Annualised, because a 20% return in four months and a 20% return in two years are not the same business.
The property
Acquisition to your closing, not just construction.
Taxes, insurance, utilities, security, lawn.
The money
$18,000 of your own money into the purchase
Hard money commonly runs well above conventional.
Selling it
Profit
$29,012
92.0% annualised on $75,715 of your own money over 5 months.
Return on total cost16.3%
Cash on cash38.3%
Annualised92.0%
Everything it costs
Purchase$120,000
Repairs$45,000
Financing$6,715
Holding$6,000
Selling$18,273
Purchase$120,000
Repairs$45,000
Points$2,040
Interest over 5 months$4,675
Holding costs$6,000
Commission$13,500
Concessions$3,375
Owner's title policyTexas promulgated rate on the sale price$1,398
All in, plus selling$195,988
Sale price$225,000
Profit$29,012
Annualised is the number that matters. A 38.3% return in 5 months is a different business from the same return over two years. Every extra month you hold this costs $1,200 in carry and drags the annualised number down.
The line people underestimate is holding cost, and the line they overestimate is sale price. Move both against yourself and see whether the deal still works.
This is a planning estimate, not an offer, an appraisal, a quote, or a commitment. Everything runs in your browser: no figure you type here is sent anywhere or stored.