How Much Does It Cost to Flip a House? A Real Fix and Flip Investing Guide

You're thinking about flipping houses. Smart. But most new investors blow right past the real numbers—they see HGTV and think it's all shiplap and profit.

Here's the truth: the average flip costs $90,000 to $180,000 all-in. If you want to make money instead of losing it, you need to know exactly where every dollar goes before you make an offer.

The Real Breakdown: Where Your Money Goes

Flips have more moving parts than you think. You can't just add purchase price plus renovation and call it done. That's how people lose money.

Before you make an offer, build a complete budget. I'm talking every expense from closing to sale. This isn't busywork—it's survival.

Purchase Price and Acquisition Costs

Your purchase price is obvious. What isn't? Closing costs running 2-5% of purchase. On a $150,000 property, that's $3,000 to $7,500 for title, attorney fees, taxes, and recording.

Then there's inspections before you close—$400 to $800 minimum. Need specialists for foundation, mold, or structural? Add more.

Here's what kills people: if you've got $150,000 total and the house costs $130,000, you don't have $20,000 for reno. After closing and contingency, you've got $12,000. See how fast that shrinks?

Renovation Costs

This makes or breaks your deal. Light cosmetic work runs $15,000 to $30,000. Full gut job? $50,000 to $100,000+.

Break it down by room. Kitchens eat the most—$8,000 to $25,000. Bathrooms run $4,000 to $12,000 each. Don't skip HVAC ($3,000-$7,000), plumbing ($1,500-$4,000), or electrical ($2,000-$6,000).

Add 20% to whatever your contractor quotes. Things will go wrong. Permits take longer. The 20% buffer isn't pessimism—it's math.

Get everything in writing. Every line item needs specific materials, quantities, and labor costs. No handshakes. That's how you blow the budget in week two.

The Hidden Costs That Kill Profits

The costs you don't see coming destroy your margins. Here's what actually happens.

Financing Costs

Unless you're paying cash, you're borrowing. Hard money lenders charge 8-15% interest plus 2-5 points upfront.

On a $150,000 loan at 12% for six months: $9,000 interest. Add 3 points ($4,500). Your financing just cost $13,500.

Don't calculate for three months when the average flip takes five to six. Use the realistic timeline, not your hopeful one. I've watched people lose their entire profit because they underestimated by two months.

Carrying Costs

Every day you own the property costs money. Taxes, insurance, utilities, HOA fees—$1,000 to $2,500 monthly depending on market.

Planning a three-month flip? Budget $3,000 to $7,500. But first-time flips usually take six months, doubling that number.

Utilities during reno: $200-$400 monthly. Vacant property insurance: $1,200-$2,500 annually. Property taxes: $300-$800 monthly in some states. Track these weekly, not monthly.

Contractors and Labor

General contractors charge 10-20% of total renovation cost on top of materials and labor. For a $50,000 reno, that's $5,000 to $10,000 just for project management.

Some people try being their own GC to save money. Bad idea unless you've got serious construction experience and time. The mistakes usually cost more than you save.

If you're hiring trades directly: plumbers run $45-$150/hour, electricians $50-$100/hour, HVAC $75-$150/hour. Labor typically represents 20-35% of total renovation budget.

Get at least three bids for major work. Don't automatically take the cheapest—that's how you get shoddy work that fails inspection.

Permits and Inspections

Permits run $500 to $5,000+ depending on scope and location. Major renovations in SF or NYC? Could hit $10,000.

Architectural drawings for major work: $2,000 to $5,000. Engineering reports for structural: $1,500 to $3,000. Don't cut corners here—unpermitted work haunts you at sale.

Permitting adds weeks or months to your timeline. Some places take 30-45 days just for approval. That's carrying costs piling up before you can start work.

Selling Costs

You've renovated. Now you need to sell. This final stretch costs more than you think.

Agent Commissions

Standard rate is 5-6% of sale price, split between agents. Selling for $250,000? You're paying $12,500 to $15,000.

Some try FSBO to save this. Unless you've got serious marketing skills and time, you'll sell for less and take longer—costing more overall.

Staging and Photography

Professional staging can boost sale price 5-15%. It costs $2,000 to $5,000 for a full house, or $500-$2,000 for virtual staging.

Professional photography: $200-$600. Add $300-$500 for drone and video. Yeah, it seems like a lot. But crappy phone photos cost you way more in lost sale price and time on market.

First impressions happen online now. If your listing photos look amateur, buyers scroll past. It's a tiny percentage of total budget but dramatically impacts sale price and timeline.

The 70% Rule (Memorize This)

Never pay more than 70% of ARV minus rehab costs. This protects your margins and keeps you from overpaying.

Example: Property ARV is $300,000, needs $50,000 in repairs. Calculate 70% of $300,000 ($210,000), subtract repairs ($50,000). Maximum purchase price: $160,000.

Why 70%? That 30% covers financing, holding costs, commissions, closing costs on both ends, and your actual profit. Break this rule and you're risking everything.

Real Numbers: A Complete Example

You're buying a $130,000 house needing $40,000 in reno. Let's run it.

Purchase: $130,000. Closing (3%): $3,900. Renovation plus 20% buffer: $48,000. Financing (6 months): $11,700. Carrying costs (6 months): $9,000. Permits and inspections: $2,500. Selling costs (6% of $210,000 ARV): $12,600. Staging: $3,000.

Total investment: $220,700. If you sell for $210,000, you lost money. This is why the 70% rule exists.

At a $98,000 purchase (70% rule price), total investment drops to $188,700. Profit: $21,300 before taxes. That's respectable, but it shows how tight margins are.

Run these numbers before you make an offer, not after. And always have an exit strategy if things go sideways.

Property Type Matters

A 1,200 sq ft ranch from 1985 has different costs than a 2,500 sq ft Victorian from 1920.

Single-family homes run $25-$75 per square foot for reno. Condos can be cheaper since you're not dealing with exterior work, but HOA restrictions can slow you down.

Older homes (pre-1970) need more work than you think. Outdated wiring, cast iron plumbing, potential asbestos or lead paint—budget an extra 30-40% for surprises.

Get a thorough inspection and talk to contractors who specialize in older homes before you commit. Don't fall in love with a beautiful old house and blow your budget.

Timeline Reality Check

Most flips take 5-8 months from purchase to sale. Not three months. Not four weeks like TV shows.

Light cosmetic flips can be done in 2-3 months with a solid contractor and no permit delays. These offer the best ROI because you're minimizing holding costs.

Medium renovations (kitchen, bathroom remodels, some systems work) take 4-6 months. More permits, pricier materials, more delays.

Full gut jobs touching every system? 6-9 months easily. Maybe longer with permitting delays or surprise issues.

First-time flippers should add 30-50% to whatever timeline they think is realistic. Contractors get sick. Materials arrive late. Inspections fail. Weather delays outdoor work. This isn't an excuse—it's reality.

How to Cut Costs Without Cutting Quality

Buy materials directly instead of letting contractors mark them up—save 10-20% immediately. Build relationships with wholesale suppliers.

Time your flip right. Start in November when contractors are slow and materials might be cheaper. Finish in spring when buyer demand peaks.

Don't over-improve for the neighborhood. If comps have laminate countertops, you don't need quartz. Match neighborhood standard, maybe 5-10% above. Never become the most expensive house on the block.

Do your own demo. Ripping out old cabinets, flooring, and fixtures doesn't require specialized skills—save $2,000-$5,000 in labor. Just don't touch electrical, plumbing, or structural. Know your limits.

The Bottom Line

Most successful flips cost $100,000 to $200,000 all-in. Your profit margin should be $25,000 minimum to make the risk worthwhile.

The investor who wins is the one who estimates costs accurately before making an offer. Use spreadsheets. Get multiple bids. Pad every estimate. Walk properties with contractors before you buy.

Your first flip will cost more and take longer than you expect. That's fine—it's part of learning. But if you budget properly and follow the 70% rule, you'll survive and build a profitable business.

Every successful investor I know can tell you exactly what they spent on their last flip, down to the penny. They track expenses in real-time, adjust when needed, and never let emotion override numbers.

The costs are real. So are the profits for investors who do their homework.

Ready to run your numbers with confidence? FlipMantis gives you real-time comps, renovation cost estimates, and profit calculators built specifically for fix-and-flip investors. Stop guessing. Start flipping smarter.

FAQ

How does flipping houses work?

You buy a distressed property below market value, renovate it, and sell for profit. The execution is harder than the concept—you need accurate cost estimates, solid contractors, and strict timeline management to succeed.

Is fix and flip a good investment strategy?

It can be excellent for the right person with the right deal, but it's not passive or easy. You can make $30,000-$60,000 in six months on a successful flip, but you're working for that money. Best approach? Use flipping to generate capital, then diversify into rentals or other investments.

What's the average profit on a flip?

Median profit is $30,000-$35,000, ranging from $25,000 to $70,000 depending on market and execution. Your ROI matters more than absolute profit—making $30,000 on a $120,000 investment (25% ROI) beats making $50,000 on a $300,000 investment (16.7% ROI).

How do you evaluate a flip property?

Start with ARV using recent comps (last 3-6 months) with similar size and condition. Walk the property with an experienced contractor for realistic estimates. Run numbers using the 70% rule. If the deal leaves at least $25,000-$30,000 potential profit, it might be worth pursuing.

How long does it take to flip a house?

Most flips take 5-8 months from purchase to sale. Light cosmetic work can be done in 2-3 months. Medium renovations take 4-6 months. Full gut jobs need 6-9 months or more. First-timers should add 30-50% to their expected timeline.