House Flipping Spreadsheet: How to Analyze a Deal Before You Make an Offer

You’re standing in a house that needs work. The listing says $145,000. You think it’s worth $265,000 fixed up. There’s a number somewhere between those two that makes this a good deal and a number that makes it a disaster, and you have about a day to figure out which is which before someone else offers.

That decision is arithmetic, and it’s the same arithmetic every time. The problem is that most people run it in their head, which means they run three of the five cost buckets and skip the two that quietly eat the profit.

Here’s the full analysis, worked end to end on a real-shaped deal, plus the structure that lets you rerun it in thirty seconds when the seller counters.

The Only Equation That Matters

ARV − (Purchase + Buy Costs + Rehab + Holding + Selling) = Profit

Five cost buckets. Most flips that go wrong go wrong because two of them — holding and selling — were treated as rounding errors. They aren’t. On the deal below they come to $34,200 combined, which is most of the profit.

Work in this order, because the order stops you from talking yourself into a number:

1. ARV first, from comps, before you know what the seller wants.
2. Rehab second, line by line, before you decide what the house is worth to you.
3. The other three buckets, which are largely formula-driven once you know the purchase price and hold time.
4. Profit last — and the purchase price is the variable you move until the profit works.

That last point is the whole discipline. Your offer is an output of the analysis, not an input to it.

A Full Worked Deal

Every number below is a stated assumption, not a market average. Your market’s commission structure, transfer taxes, and rehab pricing will differ. What transfers is the structure.

The property: 3 bed / 2 bath, dated but structurally sound, listed at $145,000.

1. ARV: $265,000

Pulled from six sold comparables in the same subdivision, all closed in the last six months, adjusted for square footage and condition. The comps averaged $172 per square foot; the subject is 1,540 sq ft. The top three comps — the ones that had been fully renovated — averaged $265,000.

Use renovated comps, not average comps. You’re pricing what the house will be, not what it is.

2. Rehab: $41,470

Built line by line across seven categories rather than estimated as a lump sum:

The contingency is not padding. It’s the line that pays for the thing behind the wall.

3. Buy-side closing costs: $12,050

Inspection $500, appraisal $450, title search and insurance $1,500, attorney/closing agent $800, recording $200, transfer tax $500, loan origination $3,000, points $1,500, prepaid insurance $1,200, prepaid taxes $1,500, survey $400, miscellaneous $500.

Note what’s not in there: the earnest money deposit. It’s real cash you have to bring, but it’s credited against the purchase price at closing, so counting it here would double-count it. This is one of the most common spreadsheet errors in flip analysis.

4. Holding costs: $12,000

$2,000 a month × 6 months.

Hold time is the input people are most optimistic about. Four months of rehab plus a 45-day escrow is already five and a half months, and that assumes nothing waits on a permit. Run the deal at your realistic hold time, then run it again at that number plus two months and see whether it still works.

5. Selling costs: $22,200

Listing agent 3% ($7,950), buyer’s agent 3% ($7,950), seller’s title policy $1,500, closing attorney $500, recording and transfer tax $800, home warranty $500, staging $1,500, photography $500, prorated property taxes $500, miscellaneous $500.

That’s 8.4% of ARV — a useful sanity figure to carry in your head. If your analysis has selling costs at 6%, you’ve counted the commissions and stopped.

The bottom line

• ROI on total cost: 17.4%
• Annualized ROI (6-month hold): 37.8%
• Profit per month: $6,547
• Profit margin on ARV: 14.8%

At $138,000 this is a deal worth doing. At the $145,000 list price, profit drops to $32,280 and ROI to 13.9% — still positive, but you’ve given away $7,000 of your cushion before a single surprise shows up.

That $7,000 swing on a $7,000 price change is the point. Nothing else in the analysis moves the outcome dollar-for-dollar the way the offer does.

The 70% Rule Is a Filter, Not a Verdict

The rule of thumb: Maximum offer = (ARV × 0.70) − rehab.

On this deal: ($265,000 × 0.70) − $41,470 = $144,030. Our $138,000 purchase clears it, so the deal passes the screen.

What the rule is good for is triage — deciding in fifteen seconds which of forty listings deserve a real analysis. What it isn’t good for is the decision itself, because the 30% it holds back is a single blended allowance for closing costs, holding, selling and profit. Change the hold time or the rehab scope and that allowance is wrong in ways the rule can’t see. On this deal, the offer that produces exactly a 15% ROI is $142,715 — close to the rule’s answer. Push the rehab to $90,000 and stretch the hold to nine months and the rule still says $95,500 while the true 15% number is far lower.

Use it to screen, then run the full stack on the survivors. The full 70% rule math, including where it breaks, is worked out here.

What the Spreadsheet Actually Has to Do

The analysis above is easy to do once. The reason it belongs in a spreadsheet is that you’ll do it forty times for every house you buy, and the version you need is the one where changing a single cell updates everything downstream.

Build it as separate tabs feeding one profit calculation:

• Deal Overview — the eight or nine inputs (purchase, ARV, rehab, hold time, closing costs, monthly holding, commission %) with profit, ROI, annualized ROI and the 70% rule check calculated live.
• Acquisition — every buy-side line item, totalled and fed into the profit tab.
• Rehab budget — room by room with materials and labor split, a contingency percentage, and an actual column so you can track variance while the job runs.
• Holding costs — monthly amounts × hold time, so changing 6 to 8 months reprices the deal instantly.
• Selling costs — commission percentages driven off ARV so a price change reprices the sell side automatically.
• Flip profit — the single tab that subtracts everything from ARV and gives you the verdict.
• Comps log — six to ten sold comps with $/sq ft, days on market and condition, averaging out to a defensible ARV. This is also what you hand a lender or a partner.
• Deal pipeline — one row per property you’re tracking, with estimated profit and ROI, so you can rank ten deals side by side.

Three things a good sheet does that a napkin can’t: it recalculates when the seller counters, it keeps the estimate next to the actual so you learn what your estimates are worth, and it stops you from silently dropping a cost bucket when you’re in a hurry.

The Five Ways the Analysis Goes Wrong

Optimistic ARV. Using active listings instead of solds, or comping against houses with a finished basement when yours doesn’t have one. ARV is the most leveraged number in the deal — a 5% ARV miss on this property is $13,250, a third of the profit.

Rehab estimated as a lump sum. “About $40k” is a feeling. The line-item version on the same house came to $37,700 plus contingency — and the only way you’d know whether $40k was high or low is to have listed it out. Here’s how to build the room-by-room estimate.

Hold time set to the best case. Every extra month is a full month of holding costs against a fixed sale price. Two extra months here is $4,000 straight off the profit.

Selling costs under-counted. Commissions are the big line but they aren’t the only line. The full cost breakdown, bucket by bucket, is here.

Wrong strategy for the property. Some houses make a good flip and a bad rental, and some are the reverse. Running the same property both ways before you commit takes ten minutes and occasionally changes the answer entirely — worked both ways on the same two houses here.

Before You Send the Offer

A short checklist you can copy:

• [ ] ARV supported by at least three sold, renovated comps in the last six months
• [ ] Rehab built line by line, with a contingency of at least 10% (15–20% on pre-1970 houses)
• [ ] Buy-side closing costs itemized, earnest money not double-counted
• [ ] Hold time realistic, then stress-tested at +2 months
• [ ] Selling costs at 8–9% of ARV, not just the commissions
• [ ] Profit clears your minimum ROI after all five buckets
• [ ] The deal still works if ARV comes in 5% low
• [ ] Offer price derived from the analysis, not from the list price

If a deal survives all eight, offer with confidence. If it fails one, the fix is almost always the same: offer less.

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