What This Calculator Does

This calculator works backward. Instead of starting with a price and hoping the numbers work out, you start with the value the property should reach after renovation and subtract every cost you expect, plus the profit you want. What remains is the maximum price you can pay and still hit your target.

Who It's For

It is for flippers, rehabbers, wholesalers, and agents underwriting renovation deals. It is especially useful before making an offer, when the seller's asking price can be tested against your own numbers instead of a rule of thumb.

What Each Input Means

  • ARV: your estimate of the property's value after the renovation, usually built from comparable sales.
  • Rehab cost: your renovation budget, ideally built line by line with the Rehab Estimator.
  • Holding costs: the total cost of carrying the property while you renovate and market it.
  • Selling costs: commission, title insurance, escrow, transfer taxes, and other costs of the resale.
  • Financing costs: points, interest, and other costs of the money you borrow.
  • Desired profit: the amount you want to earn for the risk and work, before income taxes.

How the Calculation Works

The maximum purchase price equals the ARV minus the rehab, holding, selling, and financing costs, minus your desired profit. Every dollar added to a cost, or to your profit target, reduces the maximum price you can pay by a dollar.

What the Output Means

The result is the highest price that still leaves your desired profit, given your assumptions. If the seller's asking price is above it, the deal does not meet your target as modeled. You can negotiate, change your assumptions, or pass. The calculator shows the math; it does not tell you what to do.

Common Questions

  • Is ARV the same as appraised value? No. ARV is your estimate of future value; an appraisal is a professional opinion of current value. They can differ.
  • Should I use my best-case or conservative numbers? Conservative. Cost overruns and softer resale values are common, and the maximum price moves down as costs move up.
  • Does this include income taxes? No. The desired profit is before income taxes, which vary by investor and entity.

Limitations

The result is only as reliable as the ARV and the cost estimates. This calculator does not model taxes, insurance claims, permit delays, or changes in financing. It also does not present any investor rule of thumb as a fact; the math is built entirely from your own numbers.

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