Projected Gross Profit (Fix & Flip)

It is the spread you expect to walk away with before taxes and your own labor — the reason you take the flip risk.

Formal definition

Projected gross profit equals after-repair value minus purchase price, rehab budget, closing costs, and cumulative holding costs.

Why it matters

Lenders and experienced flippers underwrite deals on this number; if projected profit is thin, one contractor delay can turn a win into a loss.

Where you see it

• Hard-money and private-lender loan packages
• Real estate investor meetups and BiggerPockets forums
• House-flipping TV show budgets (simplified)
• Residential acquisition analyst models
• Fix-and-flip underwriting spreadsheets

Worked example

1. ARV: $320,000.
2. Purchase: $210,000; Rehab: $45,000; Closing: $8,000; Holding:
3. Projected gross profit = $320,000 − $275,000 = $45,000.
4. Interpretation: $45,000 spread before selling costs and taxes — stress-test if ARV or rehab slips.

How Business metrics calculates it

ARV − Purchase − Rehab − holding costs as entered.

Where people fool themselves

Projected profit before selling costs is a mood. Commissions, concessions, and the holding days you did not plan are how $40,000 becomes

Run it on your own numbers: the Fix & Flip calculator.