Guide
Cash to close a flip
Team RE Underwrite Lab
Cash at closing is not total profit
Cash to close is the money you wire to buy and start, not the profit at sale. It usually includes the part of the price the loan does not cover, buying costs, points, and any rehab you have to fund before draws or instead of draws.
The fix and flip calculator has a cash-needed headline from its own sample loan. This article builds a smaller stack by hand, with different figures, so you can see the lines. It is not a closing statement.
Formula
Cash to close, in this sketch, is the down payment plus buying costs plus rehab paid in cash plus points. Down payment is the purchase price minus the loan. Points are the loan times the points percent.
Interest during the hold, taxes, insurance, and utilities come later. They are holding costs, described on the holding-cost guide. Leaving them out of the closing total is correct only if you still count them before you talk about profit.
Example
Illustrative example. Purchase price is $189,000. A loan of 90% of that price is $170,100, so the down payment is $18,900. Buying costs of 2.5% are $4,725. Rehab paid in cash is $27,000. Points of 2% of the loan are $3,402. Cash to close in this sketch is $54,027. These figures are made up. They are not a lender's statement and not a flip this company closed.
If the lender will not fund until after a draw inspection, more of the rehab may be cash up front than this $27,000. The page does not see the draw schedule.
Common pitfalls
Calling the down payment the whole cash need drops buying costs, points, and cash rehab. Those lines are in the $54,027 sketch for that reason.
Comparing cash to close with profit, without the later holding costs and selling costs, makes the project look like it only needed the wire at the table. The sale still has to cover interest, carry, and commissions.
Steps
Start with the cash down payment
Price minus the loan amount is the cash that covers the purchase if the loan is smaller than the price.
Add buying costs and points
Title, escrow, and other buying costs you type, plus points on the loan, are cash at closing unless the lender rolls them in.
Add rehab you must fund in cash
Work the loan does not cover is still cash you bring. Holding costs after closing are a later stack, not this closing total.
Questions
Is $54,027 the cash the flip calculator will show?
No. The calculator uses its own sample purchase, rehab, and loan. This article is a separate sketch so the lines are easy to add by hand.
Are points cash at closing?
In this sketch, yes. Some lenders net them from the loan proceeds. If yours does, do not also subtract them from your cash a second time.
Where do earnest money deposits go?
A deposit you already sent is part of the cash you put in, and it usually counts toward the amount due at closing. This sketch does not track a deposit separately.
Does cash to close include six months of taxes?
Not in this sketch. Prepaid taxes or insurance that a lender requires would be another line. Add them if your statement has them.
Is a smaller down payment always better?
No. A smaller down payment means a larger loan, more interest, and more points if points are a percent of the loan. The wire is smaller. The carry may be larger.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.