Monthly Principle payment added to bottom line?

[Sam Erickson]

Hi Everyone,

I have a question in regards to getting to my true profit from a flip. Below is the example and question.

Say I'm flipping a house and my monthly P&I is $500. With $75 of that being Principle. I hold the property for 6 months and after my rehab cost, my monthly holding cost of $3,000 ($2,550/Interest, $450/principle) and all other fees, commissions, closing cost etc. I show a a profit of say $1,000.

Here is my question, should I add back that $450 principle so my real profit is $1,450? Or is that not really profit because I paid it and its just being returned to me? Then again if I counted it in my holding cost as an expenses then it would be profit?

As you can see I'm stuck in a circle and I don't know if I'm just over thinking it and missing the obvious answer.

Thanks for the help

Sam