📅 Tuesday, May 5, 2026 · By Kayak Capital · 8 min read

How to Calculate Your Fix-and-Flip ROI (With Real Examples)

You found a deal. The purchase price looks right, the rehab numbers seem reasonable, and the ARV makes your eyes light up. But before you sign anything, can you answer this question: What's your actual return on this deal?

If you can't calculate your fix-and-flip ROI down to the dollar — before you close — you're not investing. You're gambling. And in Phoenix's competitive market, the investors who consistently profit aren't the ones who find the cheapest houses. They're the ones who run the numbers right.

This guide walks you through the exact formula to calculate ROI on any flip, with a real Phoenix deal example so you can follow along with actual numbers. By the end, you'll know exactly how to evaluate a deal — and spot the hidden costs that quietly kill your profit. (Want a shortcut? Try our interactive fix-and-flip calculator.)

The Fix-and-Flip ROI Formula (Simple Version)

Let's start with the core formula. ROI measures how much profit you made relative to how much you invested:

ROI = (Net Profit / Total Investment) × 100
Net Profit = Sale Price − Total Investment − Selling Costs

Simple enough. But the devil is in the details — specifically, what counts as "total investment." Most new investors undercount their costs, which inflates their projected ROI and leads to nasty surprises at the closing table.

Every Cost That Goes Into Your Flip (Don't Miss These)

Your total investment isn't just "purchase price plus rehab." Here's the full list of costs that eat into your flip profit:

That "Financing Costs" row is where most investors get burned. A typical hard money lender charges 2–3 origination points plus processing, underwriting, and appraisal fees — easily $7,000–$12,000 on a $300,000 loan before you've paid a dime in interest. Those fees come straight out of your ROI.

A Real Deal Example: Chandler Fix-and-Flip ROI

Let's walk through a real deal in Chandler, AZ — one of Phoenix's strongest flip markets right now. We'll calculate the ROI step by step so you can follow the exact same process on your next deal.

The Deal — 3BR/2BA Ranch, Built 1998

Step 1: Calculate Your Financing Costs

This is where the lender you choose makes a massive difference. Let's compare a typical hard money lender against Kayak Capital's zero-fee model:

Difference: $8,450 saved with Kayak Capital. That's money that goes directly into your ROI.

Step 2: Add Your Holding Costs

Beyond financing, you're paying to own the property every month it sits in your portfolio:

• Property taxes: ~$260/month ($3,100/year on a $310K assessed value)
• Insurance: ~$150/month (investor/vacant property policy)
• Utilities: ~$200/month (electric, water — especially in Phoenix summers)
• Misc (lawn, security, etc.): ~$90/month

Total holding costs: $700/month × 5 months = $3,500

Step 3: Calculate Selling Costs

When you sell, expect to pay:

• Agent commissions (5%): $25,500
• Seller closing costs (1.5%): $7,650
• Buyer concessions (estimate): $2,500

Total selling costs: $35,650

Putting It All Together: The Complete ROI Calculation

Now let's plug everything into our formula. We'll calculate ROI two ways — with a typical lender and with Kayak Capital — so you can see exactly how financing fees impact your return.

Same house. Same rehab. Same sale price. But the investor using Kayak Capital walks away with $8,450 more profit and a 35-point higher ROI — simply because they didn't pay lender fees.

What's a "Good" ROI on a Flip?

This depends on your market and hold time, but here are general benchmarks experienced Phoenix flippers use:

Important: ROI is not the same as profit. A 200% ROI on a $10,000 investment is $20,000 in profit. A 50% ROI on a $100,000 investment is $50,000 in profit. Don't chase percentages — chase dollars. But use ROI to compare deals apples-to-apples.

The 70% Rule: A Quick Gut-Check Before You Run Full Numbers

Before you break out the spreadsheet, experienced flippers use the 70% rule as a quick filter:

Maximum Offer = (ARV × 70%) − Rehab Costs

For our Chandler example: ($510,000 × 70%) − $55,000 = $302,000 maximum offer. Our purchase price of $310,000 is slightly above the 70% rule, but the deal still works because of the strong ARV and manageable rehab budget. The 70% rule is a guideline, not gospel — run the full ROI calculation on any deal that's close.

5 ROI Mistakes That Cost Phoenix Flippers Thousands

1. Ignoring lender fees in your projections. If you're only calculating interest and forgetting origination points, processing fees, and junk fees, you're overstating your ROI by 10–20%. A $300,000 loan with 2 points and $2,000 in junk fees costs you $8,000 before your first interest payment.

2. Using Zillow estimates as your ARV. Zillow's Zestimate can be off by 5–10% or more. Always use actual sold comps within a half-mile radius from the last 90 days. Your lender can help you verify — at Kayak Capital, we review comps on every deal we fund.

3. Forgetting holding costs add up fast. At $700/month in taxes, insurance, and utilities, a 2-month delay on your rehab costs you $1,400. On a $310,250 loan at 12%, that delay also adds $6,205 in interest. Total cost of being 2 months late: $7,605.

4. Not budgeting for selling costs. Agent commissions alone eat 5–6% of your sale price. On a $510,000 sale, that's $25,500–$30,600. Add in closing costs and concessions, and you're looking at $33,000–$40,000 to sell. That's real money that must be in your ROI calculation.

5. Calculating ROI on total project cost instead of cash invested. Your ROI should be based on your actual cash out of pocket, not the full project cost. If you put in $54,750 cash and make $90,337 profit, your ROI is 165% — not 24.7% (which is what you'd get dividing by total project cost). The cash-on-cash return is what matters because it tells you how hard your actual dollars are working.

Maximize Your Flip ROI — Start With the Right Lender

Every dollar you pay in lender fees is a dollar that comes directly out of your ROI. That's why we built Kayak Capital around a simple idea: the interest rate should be your only cost. No origination points. No processing fees. No junk fees. No surprises.

Over 1,700 Phoenix-area deals, we've saved borrowers millions in fees they would have paid elsewhere — and every dollar of those savings went straight to their bottom line.

Ready to run the numbers on your next deal?

• Call us at (480) 256-2274 — talk directly to a decision-maker, not a call center.
• Apply online in under 3 minutes at KayakCapital.com.
• Get approved within 1 hour and close as fast as your title company can get the docs ready.

Your next flip's ROI starts with choosing the right lender. Let's make sure those numbers work in your favor.