BP Flip Calculator VS MOA caclulation

[Jeremy Karja]

Hi everyone,

I have been more focused on rental properties vs. flipping but my wife would like to flip and I have a construction background so it make sense for extra money to put into rentals.

The question I have is when do my calculation I am finding the flip calculator gives me one number and the 70% rule a very different number.  I know the 70% rule is a "rule of thumb" but I want to make sure I am not missing anything.

For example:

ARV: 255k

Repairs: 20k

So MOA = 255k x .7 - 20k = MOA of 158,500

However the BP calculator says 195k is the MOA whichlooks like this:

Financial Summary for Flipper

Financial Breakdown

Purchase Costs

Purchase Price:	($195,969.00)
Purchase Closing Costs:	($2,500.00)
Total	($198,469.00)

Rehab Costs

Total Rehab Costs:	($20,000.00)
Total	($20,000.00)

Holding Costs

Monthly Holding Costs:	($1,276.00)
Total Days Held:	180
Total	($7,656.00)

Sales Costs

Sales Price After Fix Up (ARV):	$255,000.00
All Selling Closing Costs:	($2,500.00)
Real Estate Agent Fees:	($6,375.00)
Total	$246,125.00

Total Profit for Flip

$20,000.00

Flip Hypothetical Profit If Held For...

45 Days	90 Days	270 Days
$25,742.00	$23,828.00	$16,172.00

What am I missing?  Why are they different?

Thank you!

[Jason D.]

The BP calculator bases the MAO solely on the profit you enter. So the higher the ARV, the farther off it will be from the 70% rule