Ask someone about flip math and you usually hear: buy at four hundred, put in a hundred, sell at six hundred, make a hundred. Real flips have at least six more cost lines, and together they routinely eat half of that imagined profit. Here is the full list, so the surprise happens on a calculator and not at closing.
Acquisition costs
Buying costs more than the price. Legal fees, title insurance, transfer taxes, inspections, and lender fees typically add a low single-digit percentage of the purchase price before you own anything.
Financing costs
Most flips use hard money — short-term lending built for renovation deals. Expect points up front plus a high interest rate, and remember you pay that interest every month you hold the property. A two-point, twelve-percent loan on a six-month flip is a very real number; the same loan on a twelve-month flip is double.
Holding costs
Every month you own the property you pay property taxes, insurance, utilities, and sometimes water and maintenance — on a house producing no income. Holding costs are why experienced flippers are obsessed with timelines. The renovation that slips from four months to nine does not just delay the profit; it converts it into carrying costs.
Selling costs
At exit there are legal fees and transfer taxes again, plus any concessions the buyer negotiates. Selling directly on Homes District removes the commission line entirely, which on a typical flip is one of the largest single line items in the deal.
The contingency you hope not to use
Open walls in any older building in Brooklyn, Monsey, or Lakewood and you will find something — plumbing, knob-and-tube wiring, a structural surprise. Experienced investors carry a renovation contingency of ten to twenty percent. If you do not use it, it becomes profit; if you did not budget it, it becomes a problem.
The fix and flip calculator walks through every line above — acquisition, hard money points and interest, monthly holding, soft costs, and a built-in stress test that shows what happens if the sale price comes in lower or the timeline runs longer. Run the full numbers before you make the offer.