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Your flip profit is set the day you buy, not the day you sell

A flip's profit is decided at purchase. The sale price, the rehab and the selling costs are set by the market; the only number you control is what you pay. Below, one real Tacoma listing shows how each $10k of purchase price moves the whole profit grid.

The market sets every number except one

ARV $540k comps set it Selling 6.5% $35k agents set it Carry + loan $27k lender sets it Rehab $110k contractor sets it Your profit $50k your target Max price $318k only you set it

Sample from the PropDossier sample report, 6122 Fawcett Ave, Tacoma (public data as of 2026-07-22; county record via Pierce County ATIP). Bars not to scale.

Work backwards from the After-Repair Value (ARV): the price renovated comps say the house will sell for. Subtract selling costs, carry, rehab and the profit you need. Whatever is left is the most you can pay. Every input but the last one was decided by other people.

Three price lines, one listing

$318k +$50k · 79% of ask $337k +$30k · 83% of ask $366k break-even · 90% of ask $404,444 asking · −$40k clears your minimum thin you work for free, then pay

ARV $540k, rehab $110k, sample hard-money terms (76% purchase loan, 100% rehab loan, 10%, 1 point), 6.5% selling costs, $600/mo holding, 6 months.

The listing asked $404,444 and, renovated, would sell for about $540k. That sounds like room. It is not: after $110k of rehab, six months of carry and selling costs, buying at ask loses about $40k. Break-even is $366k; a $50k net needs $318k, or 79% of ask.

What each $10k of price does to the grid

Cells = net profit in $k. Rows: rehab $90k / $110k / $140k. Columns: ARV $515k / $540k / $565k. Green ≥ $50k, amber $0–50k, red = loss.

In this model each $10k added to the price takes about $10.5k off every cell at once, because loan interest and points ride on the price too. At $318k one cell is red. At $350k, only $16k above the $30k line, three are. At break-even six are. At ask, eight of nine, and the ninth is working for free.

Rehab can only lose the money, not earn it back

$0 net +$50k $0 −$50k $318k $366k $404k ask band = best case (rehab $90k or ARV $565k) $300k $410k purchase price slope: about −$10.5k per +$10k of price

Same listing, same model. The best rehab outcome moves the line by roughly $20k; the ask overshoots the $50k line by $86k.

A tighter rehab or a lucky comp shifts the line by $20k–25k. The wrong purchase price shifts it by $86k. You cannot renovate your way out of an overpayment; you can only make the loss smaller.

Three ways to lose it at purchase

Mistake 1
"Nicer finishes will sell higher."
Renovated comps set the ceiling for the street. Spend past it and the extra dollar returns less than a dollar.
Mistake 2
"The market will catch up if I hold."
A financed flip burns interest, taxes and utilities every month. Hold time is a cost line, not a rescue plan.
Mistake 3
"Buy it first, figure it out later."
Bought at ask, eight of nine outcomes lose. There is nothing to figure out afterwards.

Experienced flippers do the reverse: compute the three lines first, negotiate to them, and walk when the seller will not meet them. Passing on a house costs nothing; buying the wrong one does.

Why we publish the math. We flip houses ourselves and most listings we analyze end in a pass. Our methodology shows how the ARV and cost lines behind these grids are verified, and the sample report lets you drag the purchase price and watch the grid change.

Sources

Please read. Figures are from a sanitized sample analysis dated 2026-07-22 using sample loan terms, not a real quote. This article is for informational purposes only and is not an appraisal, brokerage service, or investment, legal, or tax advice. Verify independently and consult licensed professionals before any real estate decision.

FAQ

Can a better renovation push the sale price above the neighborhood ceiling?

Rarely, and not by enough to matter. Buyers pay for the street, the size and the condition tier, not for the extra cost you sank into finishes. Past the ceiling set by renovated comps, each additional rehab dollar returns less than a dollar, which is why the 3x3 grid reads worse, not better, as rehab spend rises.

Why not just hold the house until the market catches up?

A flip is financed. In the sample model each month costs interest on the purchase loan and rehab loan plus about $600 of taxes, insurance and utilities; on a $400k purchase that is well over $3,000 a month. Waiting for appreciation while paying that carry is a bet, not a plan.

How do you set the three price lines?

Start from the After-Repair Value (ARV) supported by county-verified sales, subtract selling costs, holding costs, financing, rehab and your target profit. What is left is the most you can pay. Run it for break-even, a modest profit and your minimum acceptable profit; those are the three lines you take into a negotiation.

Does PropDossier tell me what to offer?

No. A PropDossier report shows the ARV support, the cost assumptions and the resulting reference lines, with every figure linked to its source. Offer strategy, financing and the decision to buy are yours, ideally with licensed professionals involved.

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Published 2026-08-26 · Updated 2026-08-26 · PropDossier Research