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Updated almost 4 years ago on . Most recent reply

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42
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Scott Michael
  • Flipper/Rehabber
  • Portland, OR
10
Votes |
42
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I've flipped a house, now how do I calculate my profit?

Scott Michael
  • Flipper/Rehabber
  • Portland, OR
Posted

Hi everyone!

I'm a wholesaler who has gotten into flipping. I just flipped my second house and am trying to figure out how much money I made.

I have used a pro-forma profit projection spreadsheet provided to me by my hard-money lender which bases projection on purchase price, hard money origination fees, closing costs purchase and sale, rehab costs, realtor fees, and holding costs, and I have replaced the projected numbers with my actual numbers. This gives me a Profit of $61,898.55.

I then tried using the closing statements from when I bought it and when I sold it. The Due to Seller when I sold it was $148,042 and the Due From Buyer when I bought it which was $70,226, and the difference was $77,816, and then subtracted holding costs of $9,711, and get a resulting $68,105. I thought that the number should match the sale price minus purchase price and all costs method.

Wanted to see if someone can tell me why these might not match, and how I should calculate profits at the end of a flip.

Thank you!

Most Popular Reply

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1,096
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James Mc Ree
  • Rental Property Investor
  • Malvern, PA
820
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1,096
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James Mc Ree
  • Rental Property Investor
  • Malvern, PA
Replied

Your profit = Sale price- {Everything you spent}

The sale price is a given once you sell, so that is easy. This assumes you have no other income from the property, such as a rental. You might have a seller assist or sold some artifacts from the property you can add to your revenue.

Your expenses are what you need to tally. Include everything for which you spent money: costs of buying, rehabbing, holding and selling. Buying is usually just your closing costs, but would also include inspections, fees, etc. Rehabbing includes everything you spent to make the property beautiful. Holding is utilities, taxes, insurance, lawn/snow maintenance, etc. Taxes are also included in "Buying" and "Selling" closing costs, so don't double count. Selling is your marketing costs plus closing costs. Across all of these categories you have your mileage/toll costs.

There is no one else who can give you this number as you need to tally all of your expenses as they transpired between your buy and sell.

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