Frequently asked questions
Everything you need to know about house flipping math, the calculator, and your account.
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- The 70% rule is a quick underwriting guideline that says an investor should pay no more than 70% of a property's after-repair value (ARV) minus the cost of repairs. The formula is: MAO = (ARV × 0.70) − Rehab Costs. This leaves room for profit, closing costs, holding costs, and unexpected expenses.
- ARV stands for After Repair Value — the estimated market value of a property after all planned renovations are complete. It's determined by running comparable sales (comps) of similar properties that have recently sold in the same area. Accurate ARV estimation is the single most important skill in house flipping.
- BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy involves purchasing a distressed property, renovating it, placing a tenant, doing a cash-out refinance based on the improved value, and using those proceeds to purchase the next property. The goal is to recycle your capital indefinitely.
- Wholesale real estate involves finding a property under contract at a below-market price, then assigning that contract to an end buyer (typically a fix & flip investor) for an assignment fee, without ever taking title to the property. The wholesaler profits from the spread between the contract price and what the end buyer pays.
- Flip profit = Sale price − Purchase price − Rehab costs − Closing costs − Holding costs − Financing costs. The FlipIt calculator handles all of this automatically. The key is being realistic about each cost category, especially rehab (add a 15% contingency) and hold time.
- Most experienced flippers target a minimum of 15–20% ROI per deal, which translates to roughly 30–40% annualized on a 6-month flip. However, markets vary significantly — in competitive markets, 10–15% ROI may be acceptable for lower-risk properties.
- Hard money loans are short-term, asset-based loans used by real estate investors to finance flips. Unlike conventional mortgages, they are based primarily on the property's value (after repair) rather than the borrower's credit. They close faster but cost more — typically 10–14% interest and 2–3 origination points.
- No account is required to use the calculator — your numbers are calculated locally. To save deals and track projected vs. actual results, create a free account. Your data is stored securely and is only accessible to you.
- After creating a free account and saving a deal, go to your dashboard. Each deal shows a "Log actual numbers" button. After you close the flip, enter your real sale price, actual total costs, and close date. FlipIt will display the variance between your projection and reality.
- MAO is the highest price you should pay for a property to achieve your target profit. The standard formula is ARV × 70% − Rehab = MAO. If you need a higher profit margin or expect higher costs, use 65% or 60% instead of 70%.
- Land flips share the same core math (buy low, sell higher, profit = sale − all costs) but have a different cost profile. There's no rehab cost, but due diligence (surveys, title search, zoning research), marketing, and longer hold times are common. Margins tend to be higher as a percentage because competition is lower.
- Cash-on-cash (CoC) return measures annual rental income as a percentage of the cash you have left invested in the deal after the refinance. If you refinanced out 100% of your capital, you have infinite CoC return — you're earning rental income with zero of your own money remaining in the deal.
Still have questions? Try the calculator or check our learning center.