A flip’s profit can be counted before its costs or after them, and against the sale price or against your own cash. On the house below, the same flip’s profit reads anywhere from 16.5% to 123.9%. Before you decide what a flip should make, find out which number you’re looking at.
How much money can you make on a house flip?
ATTOM, a property data company that tracks flips through public sale records, puts the typical flip’s profit margin at 25.4% and its typical gross profit at $66,000 in its report for the first quarter of 2026, released in June. As of September 2026 that’s its newest quarterly flipping report, and the figures change every quarter.
Both numbers are gross. ATTOM defines gross profit as “the difference between what flippers purchased and sold homes for.” Its methodology says that leaves out rehab costs and other expenses, and that the percentage is the gross profit divided by the original purchase price. ATTOM works from sale records, so it sees two prices and nothing spent in between.
What does gross profit leave out?
Gross profit leaves out every cost of a flip except the house itself. Take a house bought for $245,000 that needs a $50,000 rehab and should sell for $425,000 once it’s done. That sale price is the after-repair value, or ARV. At $245,000, the purchase passes the 70% rule, a rule of thumb for the most to pay, with $2,500 to spare.
In this example, a short-term flip loan, often called a hard money loan, covers 85% of the purchase price at 10% interest plus 2 points (2% of the loan, paid up front). You pay for the rehab yourself. Closing costs when you buy are 2% of the price, and holding costs (the taxes, insurance and utilities while you own the house) run $1,100 a month. The job takes six months from purchase to sale, and selling costs 8% of the sale price.
| Gross profit | After every cost | |
|---|---|---|
| Sale price (ARV) | $425,000 | $425,000 |
| Purchase price | −$245,000 | −$245,000 |
| Rehab | – | −$50,000 |
| Closing costs when you buy (2%) | – | −$4,900 |
| Holding costs, 6 months at $1,100 | – | −$6,600 |
| Loan points and interest | – | −$14,577 |
| Selling costs (8% of the sale) | – | −$34,000 |
| Profit | +$180,000 | +$69,923 |
These are example figures, not a forecast for any market.
Counted ATTOM’s way, this flip makes $180,000. After the rehab and the costs of buying, holding, borrowing and selling, it makes $69,923, about 39% of the gross. Those costs take 25.9% of the sale price.
What is a house flipping profit margin?
A profit margin can be figured more than one way, so check what a quoted one divides by. In the flip calculator, Profit margin is the profit after every cost as a share of the sale price, one of four ways it sizes the same profit.
| This flip | In the flip calculator | |
|---|---|---|
| In dollars, after every cost | $69,923 | Net profit |
| As a share of the $425,000 sale | 16.5% | Profit margin |
| As a share of your $112,828 in cash | 62.0% | Return on cash |
| Return on cash, over a full year | 123.9% | Annualized return |
The calculator leads with the dollars, “profit on a $425,000 sale, after all costs,” and lists the percentages under “The numbers behind it.” Each sets the same $69,923 against something different.
- Profit margin divides by the sale price, the money that has to cover every cost. The calculator treats it as the cushion for whatever goes wrong.
- Return on cash divides by your own money, which the calculator lists as “Your cash in the deal”: $112,828 here, counting the $36,750 down payment, the rehab, and the closing, holding and loan costs. It moves with how you borrow: with the rehab in the loan too, the flip would pay $3,500 more in points and interest and make $66,423, a 15.6% margin, on $66,328 of your cash, a 100.1% return.
- Annualized return stretches the return on cash to a full year, so a six-month flip can be set beside a rental. It assumes the next flip starts the day this one sells. In dollars, this flip makes $11,654 a month, a figure the calculator leaves to you.
ATTOM’s 25.4% is none of these: it divides a gross profit by the purchase price. This flip is 73.5% ATTOM’s way and 16.5% the calculator’s.
What does a rehab overrun or a slow sale do to the margin?
Every surprise on a flip is paid for out of the margin. Here’s the same flip with the rehab running $10,000 (20%) over budget, with the sale coming three months late, and with both.
| Net profit | Profit margin | Return on cash | Annualized return | |
|---|---|---|---|---|
| As planned, 6 months | $69,923 | 16.5% | 62.0% | 123.9% |
| Rehab $10,000 over | $59,923 | 14.1% | 48.8% | 97.6% |
| Sold 3 months later | $61,416 | 14.5% | 50.6% | 67.5% |
| Both | $51,416 | 12.1% | 39.1% | 52.2% |
The two surprises cost similar amounts, $10,000 and $8,506, but they hit different measures.
The overrun comes straight off the profit and takes 2.4 percentage points off the margin. Because you pay for the rehab yourself, it also adds $10,000 to your cash in, so the return on cash drops from 62.0% to 48.8%.
The delay costs $2,835 a month: $1,100 of bills and $1,735 of interest on the $208,250 loan. It takes 2 points off the margin, but the annualized return falls from 123.9% to 67.5%, and the profit per month from $11,654 to $6,824. How long it takes to flip a house covers where the months go.
Together they cost $18,506, more than a quarter of the profit, and leave a 12.1% margin.
On this flip, the calculator’s “Biggest risk” box points to neither. It names the input closest to sinking the profit and the value where it does: “It stops working if the sale comes in under $348,997,” 17.9% below the ARV. How to calculate ARV shows how to check that figure against real sales.
So how much profit should a flip make?
What’s enough depends on your time, your cash and what could go wrong with the house, so the number is yours to set. Four checks before you make an offer show how much of a profit survives:
- Count every cost. Read Net profit and Profit margin, not a gross figure.
- Add the overrun you’d believe. Raise the Rehab budget by what this job could run over.
- Add the months. Set the Holding period from your contractor’s schedule plus a local agent’s answer on selling times.
- Set the ARV beside the Biggest risk figure. The closer the two are, the less room the margin really has.
Every figure here is before income tax. This flip-or-rent comparison sets out the IRS rules for a flip’s profit; ask a tax professional how they apply to you.
To test your own flip, enter it in the flip calculator with “Rehab included in the loan?” set to match your lender. Then raise the Rehab budget and the Holding period a step at a time and watch the Profit margin.