House flipping can generate attractive returns, but widely reported profit figures rarely represent the amount an investor actually keeps.
Many market reports calculate gross profit by subtracting the original purchase price from the resale price. That figure generally does not include renovation expenses, financing costs, property taxes, insurance, utilities, selling expenses, or other project costs.
For investors evaluating a potential flip, the more meaningful figure is the projected net project profit after accounting for the complete cost of acquiring, improving, carrying, and selling the property.
There is no reliable national average for net house-flipping profit because actual expenses are not recorded consistently in public property records.
According to ATTOM’s Q1 2026 U.S. Home Flipping Report, the typical flipped property produced a gross profit of $66,000 and a 25.4% gross return. ATTOM defines gross profit as the difference between the property’s purchase price and resale price. Its calculation excludes renovation and other project expenses.
The same report found substantial differences among local markets. Some metropolitan areas produced considerably higher gross returns, while others generated only modest purchase-to-resale spreads.
These figures provide useful market context, but they do not indicate what an individual investor will earn.
Understanding the difference between gross and net profit is essential.
A simplified gross-profit calculation is:
Gross profit = resale price − original purchase price
If an investor purchases a property for $250,000 and sells it for $430,000, the gross profit is $180,000.
That number does not account for the cost of completing the project.
A more complete pre-tax project-profit calculation is:
Net project profit = resale proceeds − purchase price − acquisition costs − renovation costs − financing costs − carrying costs − selling costs
Using the same example:
The estimated pre-tax project profit would be:
$430,000 − $250,000 − $8,000 − $75,000 − $25,000 − $30,000 = $42,000
Although the gross purchase-to-resale spread is $180,000, the estimated project profit after the listed expenses is $42,000.
This example is illustrative only. Actual expenses and tax treatment vary by investor and transaction.
“Return on investment” can mean different things depending on the calculation being used.
One simplified project-level formula is:
Project ROI = net project profit ÷ total project cost
An investor may instead calculate the return on cash invested, particularly when debt financing is used:
Cash-on-cash project return = net project profit ÷ investor cash invested
These calculations measure different things. An investor should use a consistent formula when comparing potential projects.
Market reports may calculate gross returns using only the purchase price. Those figures should not be compared directly with a net return calculated after all expenses.
The initial investment can include:
Some deposits may be credited at closing, while other costs remain separate project expenses.
The renovation budget may include:
A preliminary cost-per-square-foot estimate may help screen a property, but investors should develop a detailed scope of work and obtain current contractor pricing before making a final decision.
When debt is used, potential costs include:
Investors should compare the total financing cost rather than focusing only on the advertised interest rate.
