Fix and Flip ROI Calculator

ROI (return on investment) in fix and flip investing is the net profit expressed as a percentage of total capital invested. ROI (%) = Net Profit / Total Investment x 100. Annualized ROI adjusts for the holding period so you can compare projects of different lengths on an equal basis.

ROI is simply profit divided by cost, regardless of time. Annualized ROI scales this to a 12-month equivalent: Annualized ROI = ((1 + ROI)^(12/holding months) - 1) x 100. A 20% ROI on a 4-month flip annualizes to approximately 77%, far better than a 20% ROI on a 12-month project.

Total investment includes: purchase price, purchase closing costs, all renovation and material costs, carrying costs (mortgage interest, taxes, insurance, utilities during the holding period), selling costs (commissions and closing costs), and any earnest money or option fees paid. Using detailed cost accounting prevents underestimating total capital deployed.

Annualized ROI = ((1 + Net Profit / Total Investment)^(12 / Holding Months) - 1) x 100. Example: $30,000 profit on $150,000 invested over 5 months = 20% ROI. Annualized: ((1.20)^(12/5) - 1) x 100 = approximately 59.8% annualized return.

Experienced fix and flip investors often target a minimum gross profit of 15 to 20% of the after-repair value (ARV), or an annualized ROI of 20% or more on their invested capital. However, returns vary widely depending on market conditions, execution, and leverage. Always model a pessimistic scenario with cost overruns before committing.