Break-Even Sale Price

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How to use the Break-Even Sale Price

1
Enter what you've spent
Purchase price and total rehab spending, including overruns.
2
Add the carrying costs
Closing costs on the purchase, everything paid to the lender, and holding costs through the sale.
3
Set selling costs
These scale with the price, so the tool solves for them.
4
Compare with your expected price
See how far the price could fall before you lose money.

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Use this when an offer comes in below your list price, or when you're deciding how far to cut the price.

Worked example

A flipper has spent $331,657 in total: $240,000 for the house, $60,500 on the rehab, $4,800 in closing costs, $19,157 in loan costs and $7,200 in holding costs. Selling costs are 8%.

The break-even sale price is about $360,500. At the expected price of $380,000, the flipper has a cushion of about $19,500. The price could fall 5.1% before the flip loses money.

The formula

Break-even price = Total costs ÷ (1 − Selling cost %)

Selling costs are a share of the sale price, so they're included by dividing rather than adding.

Common mistakes

Forgetting future costs. Add the holding and interest you'll pay until the sale closes, not just what you've paid so far.
Leaving out concessions. Credits to the buyer at closing count as selling costs.

What to do next