Fix and Flip Analyzing Tool

[Sean Grady]

I'm considering doing a couple flips this year but I'm concerned about the data in the BP Fix and Flip tool.  It doesn't appear to calculate or take into consideration the "down payment" for the acquisition!  This seems like a huge part of acquiring the property.  Should I add in the amount of the down payment in the closing cost section?  The tool doesn't say anything about the down payment.  

Am I missing something?  Is there a strategy I'm not aware of that doesn't require a down payment?

[J Scott]

The purpose of the fix and flip calculator is to determine profitability of the flip, not to determine the total out of pocket costs you'll incur throughout the flip process.  Out of pocket costs and when you incur them will depend on a lot of factors, and will be specific to whatever your financing strategy is.

Also note that the downpayment isn't an expense.  The downpayment is buying equity in the property, and you'll get that back when you sell.  So, it's very different than the closing costs, which are an expense that you'll never get back.

Does that make sense?  Can you clarify what your goal is with the tool -- is it to determine profitability or how much you'll have to come up with to do the project?