How Much Does It Cost to Flip a House? Every Cost, Line by Line

How much does it cost to flip a house? Add six groups: the purchase price, closing costs, rehab plus a contingency, financing, holding costs for every month you own it, and selling costs. On an example house bought for $200,000 with $48,000 of repairs and an ARV of $320,000, the house flipping costs come to $285,000 all-in for a cash buyer, leaving $35,000 of profit. With hard money the total rises to $302,100.

What does it cost to flip a house? The six groups

Every flip, whatever the market, is paid for in the same six places. The amounts change; the list does not.

All-in cost = Purchase price + Closing costs + (Rehab + Contingency) + Financing + Holding + Selling
Profit      = ARV − All-in cost

ARV (after-repair value) is what the house should sell for once the work is done. The whole cost breakdown of a flip is measured against it: a cost you forget comes straight out of the gap between the ARV and everything you spent.

This article uses one example house throughout: 1,600 sq ft, 3 bed 2 bath, built 1978, ARV $320,000. It is an example, not market data. Costs vary by market, by the lender and by the house, so treat each line as a place to put your own number.

Purchase price and closing costs

The purchase price is the biggest line and the only one you fully control at the offer stage. In the example it is $200,000.

Purchase closing costs are what it takes to close the buy: title insurance, escrow or attorney fees, recording fees, lender fees if there is a loan, prorated taxes. A planning default is 2% of the price, so $4,000 on the example house. Your title company can quote the real figure before you close, and that quote should replace the default.

Two things live close to this line and are easy to miss:

• Earnest money is not a cost; it becomes part of the price. But it is cash you need on day one.
• Back taxes, liens or HOA arrears on a distressed purchase are a cost, and they are not in the 2%.

Rehab costs plus contingency

The rehab estimate is the line that decides most flips, and the one most often guessed. The example house carries a $48,000 repair estimate built line by line: roof, kitchen, baths, floors, paint, mechanicals, each with a quantity and a unit price. If you only have a per-square-foot figure so far, rehab cost per square foot explains how to turn it into a range and why the range is wide.

Contingency is money set aside for what you could not see on the walk-through: rot behind the tub surround, a panel that has to be replaced, a sewer line that fails the camera test. The app's default is 10% of the repair estimate:

Rehab with contingency = Repairs × (1 + 10%)
$48,000 × 1.10 = $52,800

Contingency is not a place to park lines you forgot. Permits, dumpsters and cleanout are their own lines (below). Contingency is for the unknown, and on an older house or one with no attic or crawlspace access, 10% is a floor, not a ceiling.

Financing costs: points and interest

A cash buyer has no financing line. Most flippers borrow, and hard money (a short-term loan secured by the house, priced by points and a high rate) is the usual tool.

The example assumes the app's defaults: 90% of the price plus 100% of the repairs, 11% a year, 2 points.

Loan     = Price × 90% + Repairs × 100% = $180,000 + $48,000 = $228,000
Points   = Loan × 2% = $4,560
Interest = Loan × 11% × 6 ÷ 12 = $12,540
Financing cost = $4,560 + $12,540 = $17,100
Cash at closing = Price + Repairs − Loan + Points = $24,560

Interest is taken on the whole loan for the whole term. Real lenders often fund repairs in draws, so the true interest is a little lower; the app states the simplification and keeps it, because a conservative figure is the safer side to plan on. The hard money loan calculator article walks through draws, extensions and what happens when the term runs out.

Financing is the cost that grows when the schedule slips. Every extra month on this loan is $2,090 of interest before a single holding bill.

Holding and selling costs

Holding costs are the monthly bill for owning the house: property taxes and insurance divided by 12, utilities, HOA dues, lawn and snow, and loan interest if you count it here instead of under financing.

Holding per month = Utilities + HOA + Loan interest + Other + (Taxes + Insurance) ÷ 12
Holding = $1,500 × 6 months = $9,000

The example uses $1,500 a month and six months from closing to closing. Six months is a plan, not a promise; holding costs on a house flip shows how the figure moves when a project runs long.

Selling costs are paid out of the sale, which is why they are forgotten until the settlement statement arrives. Agent commissions, the seller's closing costs, transfer taxes where they apply, and anything you agree to pay for the buyer. The planning default is 6% of ARV:

Selling costs = ARV × 6% = $320,000 × 0.06 = $19,200

That is the second-largest cost on the example house after the rehab, and it exists only because the exit is a sale. (A BRRRR, where the house is refinanced and rented instead, has refinance costs in its place.)

The forgotten costs: permits, dumpsters, utilities, staging, vacant-house insurance

These are the lines that do not appear in a rule of thumb and quietly come out of profit. Add them as lines with their own numbers where you know them, and leave them as unknown where you do not.

• Permits and inspections. A roof, a panel, a water heater, a structural repair, an addition: each may need a permit and an inspection, and the fee depends on your city. Unpermitted work can also stop a sale.
• Dumpsters and cleanout. A gut rehab fills several containers. Haul-away of what the seller left behind is on top.
• Utilities turned on. Water, gas and power must be on for the crew and for the inspections; deposits and reconnection fees come first, then the monthly bills, which belong in holding.
• Staging, photography and lockbox. Part of selling costs but not inside the 6% commission default. A custom selling line keeps it visible.
• Insurance for a vacant house. A standard homeowner policy often will not cover a house that nobody lives in and that is under construction. A vacant-property or builder's risk policy costs more; ask an agent before you close, not after a break-in.
• Interest on the money you did not borrow. If you are paying cash, that cash is not earning anywhere else for six months. The app does not charge for it, but you should know it.

A few of these are small. Together, on a thin deal, they are the difference between a profit and a story.

The example house, totalled

Every line, on one table, for a cash buyer and for the same buyer with hard money.

Check the arithmetic: 200,000 + 4,000 + 52,800 + 9,000 + 19,200 = 285,000, and 320,000 − 285,000 = 35,000. Add 17,100 of financing and the profit falls to 17,900.

The hard money column shows what financing really buys: the cash at closing drops from the full price and repairs to about $24,560, and in exchange half the profit goes to the lender. Neither column is right or wrong; they are two different deals on the same house, and the house flip profit calculator article covers how margin and return on cash move between them.

How Flip Investor OS lists every cost — and leaves unknowns Unpriced

The table above is exactly how the deal analysis in Flip Investor OS is laid out: price, purchase costs, rehab with contingency, financing, holding, selling, each as its own line, each feeding the profit and the maximum offer. The defaults (2% purchase costs, 10% contingency, 6% selling, $1,500 a month) are starting points you replace with your own numbers, and you can add custom lines to the purchase, holding or selling group: a dumpster, a staging fee, a vacant-house policy.

The important rule is what happens to a cost you do not know yet. In Flip Investor OS an estimate line without a price is marked Unpriced, not $0, and the totals say Incomplete until it is priced. The same holds for the deal: a missing holding figure or an unknown custom line gives "Needs 1 more input", never a profit that looks finished. A $0 on a forgotten line is the most expensive number in flipping, because it looks like an answer.

If you want to run your own house through the same lines, open the free calculator: the flip profit and holding cost calculators are free, no card, and the walk-through, the estimate by zone and the deal analysis start from the same numbers.