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What Is a Good ROI for House Flipping? Real Numbers and Examples
By The FlipVerdict Team · June 5, 2026 · 8 min read
"What's a good ROI?" is the most-asked and worst-defined question in flipping. There are at least four different ROI metrics in active use, and the right benchmark depends on your market, your hold period, and how you financed the deal. Here are the real numbers.
The four ROI numbers flippers actually use
| Metric | Formula | What it tells you |
|---|
| Gross ROI | Profit ÷ Total Project Cost | Project-level efficiency |
| Cash-on-Cash ROI | Profit ÷ Cash Invested | Return on your actual money |
| Annualized ROI | Cash-on-Cash × (12 ÷ months held) | Comparable to stocks/bonds |
| Net margin | Profit ÷ ARV | Margin of safety on the exit price |
Most "I made 35% ROI" stories on YouTube are cash-on-cash on a leveraged deal — impressive sounding, but the gross ROI was probably 12%–14%. Both numbers are real; they answer different questions.
2026 benchmark ROI by market tier
Pulled from FlipVerdict's own underwriting data across ~14,000 analyzed flips in 2025–2026. These are realistic targets — not best-case YouTube numbers.
| Market tier | Typical ARV | Target Gross ROI | Target Net Profit |
|---|
| Entry-level Midwest / South | $120K–$220K | 15%–22% | $25K–$40K |
| Mid-tier suburban | $220K–$450K | 12%–18% | $40K–$75K |
| Coastal metro | $450K–$900K | 10%–15% | $70K–$130K |
| Luxury / high-end | $900K+ | 8%–13% | $120K+ |
Notice the inverse: higher ARV markets have lower percentage ROI but higher absolute dollars. A $40K profit at 18% ROI requires the same operational lift as a $120K profit at 12%, often less risk too.
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What "good" actually means
A good flip clears at least three thresholds simultaneously:
- Gross ROI ≥ 12% — covers the inevitable cost overruns
- Net profit ≥ $30K on a sub-$400K flip, $50K+ on a $400K–$700K, $80K+ above that — your time has to be worth the risk
- Net margin ≥ 8% of ARV — gives you concession room at the negotiating table
A 22% gross ROI on a $14K profit isn't a flip — it's a part-time job that paid less than minimum wage when you count the months.
Three real worked examples
Example 1 — Indianapolis cosmetic flip
Purchase $148,000. Rehab $35,000 (paint, floors, kitchen, bath). Holding 5 months at $4,200/mo. Selling cost 6.5% of $239,000 ARV = $15,535.
Total cost: $148,000 + $35,000 + $21,000 + $15,535 = $219,535
Profit: $239,000 − $219,535 = $19,465
Gross ROI: 8.9%. Cash-on-cash (40% down, hard money): ~25% on $77K cash. Annualized: ~60%.
Verdict: too thin on absolute dollars. A $20K profit doesn't justify the risk of a 5-month rehab. Pass.
Example 2 — Dallas suburban mid-tier
Purchase $315,000. Rehab $58,000 (kitchen, two baths, new HVAC). Holding 6 months at $5,400/mo. Selling cost 6% of $475,000 ARV = $28,500.
Total cost: $315,000 + $58,000 + $32,400 + $28,500 = $433,900
Profit: $475,000 − $433,900 = $41,100
Gross ROI: 9.5%. Net margin: 8.7%. Cash-on-cash on a leveraged deal: ~32%.
Verdict: borderline. Profit clears the $40K threshold but gross ROI is below 12% — assume one $8K overrun and it's a $33K flip. Negotiate price down or pass.
Example 3 — Phoenix value-add with permitted addition
Purchase $362,000. Rehab $112,000 (full cosmetic + 240-sqft primary suite addition). Holding 8 months at $6,800/mo. Selling cost 6% of $625,000 ARV = $37,500.
Total cost: $362,000 + $112,000 + $54,400 + $37,500 = $565,900
Profit: $625,000 − $565,900 = $59,100
Gross ROI: 10.4%. Net margin: 9.5%. Cash-on-cash: ~28%.
Verdict: solid. Absolute profit is healthy, margin clears the 8% safety floor, and the addition adds bed count — a defensible ARV play. Do it.
How to actually improve your ROI
- Buy better, don't sell harder. Every $1 you save on the buy is $1 of profit. Every $1 you push at the sell is a negotiated $0.85.
- Shorten holding time. Hire a project manager or run a tighter GC schedule. Each month saved = ~1% gross ROI.
- Stay in your finish tier. Putting designer finishes in a builder-grade neighborhood doesn't raise ARV — it just raises rehab cost.
- Renegotiate the loan. Going from 12% hard money to 9% portfolio money on a 6-month flip = ~1.5% gross ROI.
- Bundle the listing. Negotiate listing commission down to 2.5% in exchange for the next flip's listing too.
The ROI red flags that should make you walk
- Profit under $30K on anything but an entry-level market
- Gross ROI under 10% before contingency
- Net margin under 7% of ARV
- Annualized ROI below 25% (you can do better in a REIT with zero work)
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Frequently Asked Questions
What is the average ROI on a house flip?
Across US markets in 2025–2026, the average gross ROI on a completed flip lands between 10%–16%. Cash-on-cash returns on leveraged deals are typically 2–3× higher.
Is a 20% ROI on a flip realistic?
Yes, but rare on gross ROI in mid-tier and coastal markets. 20%+ gross ROI is most common on entry-level Midwest / South flips under $200K ARV.
How is flip ROI different from rental property ROI?
Flip ROI is a one-time gain on a 5–9 month project. Rental ROI is recurring cash flow plus appreciation, measured annually. They're not directly comparable without an annualized conversion.
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