Fix and Flip Calculator: How to Analyze a Deal

Purchase price: your contracted price (often below market for distressed). ARV: after-repair value based on comparable sales (use LYNK Mortgage's appraisal or comps research). Rehab budget: itemized contractor estimate for all repairs and upgrades. Acquisition costs: 2.5-3.5% of purchase price (title, appraisal, inspections, recording). Holding costs: monthly total of property taxes, insurance, utilities, maintenance, estimated holding period (6-12 months typical). Loan details: loan amount (purchase + acquisition + rehab), LYNK Mortgage rate (8.50% typical), holding period (affects interest accrual). Selling costs: realtor commission (6% of sale price), closing costs at sale (0.5-1%). Down payment: your cash contribution (5-25% of project cost). Calculate: Total cost = purchase + acquisition + rehab + (monthly holding × months) + selling costs. Sale proceeds = ARV. Profit = sale proceeds - total cost. ROI = profit / down payment. Cash-on-cash = profit / (down payment + cash reserves used).

Create columns: Acquisition (purchase price, down payment %, loan amount). Costs (acquisition fees, contractor itemized, permits, inspections). Holding (property taxes monthly, insurance monthly, utilities, maintenance, estimated months). Financing (rate, monthly interest accrual). Selling (realtor 6%, closing costs 1%). Totals: sum all costs. Proceeds: ARV (sale price). Profit: proceeds - total costs. ROI: profit / down payment %. Cash-on-cash: profit / (down payment + contingency reserve). Break-even: at what sale price do you break even? Sensitivity: what if ARV is 5% lower? What if rehab costs 10% more? What if timeline extends to 12 months (more holding costs)? A well-built spreadsheet shows: base case profit (most likely scenario), downside case (ARV down 5%, rehab up 10%), upside case (ARV up 5%, rehab on budget). This helps you understand risk range.

Profit margin: (profit / ARV) × 100%. Target 15-30%. Under 10% is risky; thin margins disappear with surprises. Over 30% is strong; often indicates a genuine deal opportunity. ROI: annual return on cash down payment. Example: $20k down, $60k profit in 6 months = $120k annualized / $20k = 600% ROI. Realistic: 50-150% ROI annually (50% = $10k profit on $20k down; 150% = $30k profit on $20k down). Cash-on-cash: total cash deployed vs profit realized. If you put down $20k but also hold $5k contingency reserve (not deployed initially), use that in denominator. Break-even analysis: at what ARV do you break even (zero profit)? If ARV drops 10%, are you still profitable? This stress-test reveals margin of safety. Sensitivity analysis: most profitable lever (purchase price negotiation vs rehab cost control)? If you can save $5k on purchase but would cost $8k extra on rehab, which is better? LYNK Mortgage evaluates all these metrics; strong flippers understand their numbers cold.

Before applying to LYNK Mortgage, do your math: does deal meet 70% rule? Is profit margin acceptable (15%+)? Is timeline realistic? LYNK Mortgage can help refine assumptions: contractor estimates (we compare to market rates), holding costs (market-specific), ARV (we appraise). But pre-work is on you. Tool options: build your own spreadsheet (free, fully customizable). Use online calculators (BiggerPockets, REI calculators, etc.—free to basic paid). Use LYNK Mortgage resources (contact us for deal analysis template). Pro flippers often have 2-3 spreadsheet versions: conservative (ARV down, rehab up), realistic (best estimate), aggressive (everything goes perfectly). Decision rule: if conservative case still hits 15% profit, it's a solid deal. If realistic case needs 20%+ ARV appreciation to profit, too risky.