House Flip Profit Calculator

Formula

To calculate the house flip profit:

\[ HP = SP - (PP + RC + EC + TC) \]

Where:

$HP$ is the House Flip Profit
$SP$ is the Selling Price of the House
$PP$ is the Purchase Price of the House
$RC$ is the Renovation Costs
$EC$ is the Extra Costs (like closing costs, financing costs, etc.)
$TC$ is the Taxes on the Profit

What is a House Flip Profit?

A House Flip Profit refers to the financial gain that an investor makes from buying a property at a low price, often in need of renovation, improving it, and then selling it at a higher price. The profit is the difference between the purchase price (including renovation costs and any other expenses incurred during the holding period) and the selling price. This is a common real estate investment strategy used to generate a quick return on investment.

Example Calculation

Let's assume the following values:

Selling Price ($SP$) = $300,000
Purchase Price ($PP$) = $200,000
Renovation Costs ($RC$) = $50,000
Extra Costs ($EC$) = $10,000
Taxes ($TC$) = $5,000

Using the formula:

\[ HP = 300,000 - (200,000 + 50,000 + 10,000 + 5,000) = 35,000 \]

The house flip profit is $35,000.