What Is a Good Profit on a Fix and Flip?

The answer depends on the market, the price point, and the amount of capital you have at risk. But experienced fix and flip investors in Massachusetts generally use these benchmarks to evaluate whether a deal is worth pursuing.

In Massachusetts premium markets like Newton, Lexington, Weston, Concord, and the South Shore communities, the dollar amounts are larger but the percentage benchmarks hold. A flip that generates $150,000 in gross profit on a $900,000 ARV project is a 16.7% gross margin before financing costs. After a 10.99% private loan at 75% LTV for eight months and selling costs, your net profit may land closer to $80,000 to $100,000. That is a meaningful return, but it requires discipline on acquisition price, renovation budget, and timeline to protect it.

The Costs That Eat Your Profit

Every experienced fix and flip investor has learned, usually the hard way, that the costs that matter most are the ones that are easiest to underestimate at the beginning of a project.

Renovation overruns are the most common profit killer in fix and flip investing. A scope of work that was estimated at $80,000 that ends up at $110,000 does not just reduce your profit by $30,000. It also extends your timeline, adding carrying costs on top of the overrun. Budget a minimum 15% contingency on every renovation and 20% on properties with older mechanical systems or deferred maintenance.

Holding costs compound faster than most investors expect. Every month your property is open, you are paying interest on your loan, property taxes, insurance, and utilities. On a $1.2 million project financed at 10.99%, your monthly interest cost alone is approximately $11,000. A two-month extension on your planned timeline costs you $22,000 before you account for any other carrying costs. That is real money that was once part of your projected profit.

Selling costs are often underestimated because they feel abstract until you are at the closing table. Agent commissions in Massachusetts typically run 4% to 5% of the sale price. On a $900,000 sale, that is $36,000 to $45,000. Add transfer taxes, attorney fees, and title costs on the sell side and your total selling costs can easily reach $50,000 to $60,000. Make sure these are in your model before you make an offer.

How Financing Affects Your Profit

The financing structure of your flip has a direct and significant impact on your bottom line. Understanding the full cost of your financing, not just the rate, is essential to accurate profit projection.

At Mayflower Venture Partners, we provide fix and flip financing throughout Massachusetts, Connecticut, Rhode Island, New Hampshire, and Maine. We issue term sheets in 24 hours and close in 10 to 14 business days. If your profit calculator shows a deal that works and you need financing to move on it, reach out today.