How to calculate a house flip break-even sale price

A flip breaks even when the net sale proceeds equal every cost already committed to the project. If selling costs are a percentage of the final sale price, divide fixed project costs by one minus that rate. Do not subtract the percentage from a guessed sale price and call the remainder a universal break-even figure.

House flipping calculation contrasting an $85,400 apparent spread with $35,160 in net profit after costs.

Use the formula

Fixed project costs: Purchase + Rehab + Financing + Holding + Buying costs + Flat selling costs
Break-even sale price: Fixed project costs / (1 - Seller cost rate)
Sale price headroom: Expected sale price - Break-even sale price

Worked example

The verified workbook example has $243,840 of costs before the percentage selling charge. Selling costs are modeled at 7 percent of the sale price.

Line	Result	Meaning
Fixed project costs	$243,840	Every modeled cost except the percentage sale charge
Seller cost rate	7%	Applied to the final sale price
Break-even sale price	$262,193.55	$243,840 / 0.93
Expected sale price	$300,000	A scenario input, not a guarantee
Headroom before target profit	$37,806.45	Expected price less break-even

Repeatable method

Enter the purchase and buying costs separately.
Build rehab from scoped line items, then add a named contingency assumption.
Estimate financing and holding from a stated duration.
Keep flat selling costs separate from percentage selling costs.
Solve for break-even, then test lower sale prices and longer holding periods.

Questions and answers

Is the 70 percent rule the break-even formula?: No. It is a screening shortcut with local assumptions. Break-even comes from the costs and sale charges in the specific deal.
Should contingency be counted before break-even?: Yes, if it is part of the amount you are prepared to spend. Keep the rate visible so the reader can change it.
What if the solved price is above the expected market price?: The current inputs do not support the deal at that expected price. Change a real assumption or decline the scenario, rather than hiding the result.

Sources

Freddie Mac: Costs of sellingCommon seller cost categories and the need to budget beyond the mortgage balance.
Consumer Financial Protection Bureau: Closing DisclosureA line by line record of loan terms and closing costs.
Consumer Financial Protection Bureau: Mortgage closing chargesExamples of charges that can appear at a real estate closing.

This is general calculation information, not investment, tax, legal, lending, or real estate advice. Verify local costs and the property assumptions with qualified professionals.