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Fix-and-Flip Holding Costs Breakdown (2026)
By Jaken Finance Group · Principal, Jaken Finance Group
Fix-and-flip holding costs in 2026 — interest carry, taxes, insurance, utilities, HOA, and days-on-market math that belongs inside your offer price.
Holding cost is the silent line on flip spreadsheets — the one that turns a $28,000 model into a $9,000 close. Rehab is visible. Interest, taxes, insurance, and a slow listing are not. In 2026, with interest-only hard money commonly in the low double digits, carry is a deal input, not a footnote.
This guide itemizes the stack, shows monthly and per-day math, and ties hold back to the offer through the 70% rule. Pair it with rehab estimating so your schedule (the thing that creates hold) is as honest as your tile count.
Key stats at a glance
- Interest-only monthly: balance × rate ÷ 12
- $200,000 at 11%: about $1,833 per month / $61 per day
- $300,000 at 11%: about $2,750 per month / $90 per day
- Full hold stack (typical): $2,400–$3,800 per month
- 4-month cosmetic: often $9,000–$14,000 hold
- 6-month mid-range: often $14,000–$22,000 hold
- Extra 30 days on market: one more full month of the stack
- Insurance: vacant dwelling or builders risk — price it, do not assume a homeowner policy
The holding-cost stack
| Line | What it is | How to estimate |
|---|---|---|
| Loan interest | Interest-only on outstanding balance | Balance × rate ÷ 12, month by month |
| Property tax | Your months of the annual bill | Annual tax ÷ 12 × months owned |
| Insurance | Vacant / builders risk / liability | Quote at contract; $80–$300+/mo common |
| Utilities | Electric, gas, water, trash | $150–$400/mo; winter heat is higher |
| HOA / condo | Dues + possible transfer delay | Monthly dues × months |
| Yard / snow / security | Occupied-looking vacant house | $50–$250/mo |
| Loan extensions | Fee + extra months if you blow the term | Avoid; price the real schedule instead |
| Slow listing | DOM beyond your model | Same monthly stack × extra months |
Closing costs (points, title, commission) are transaction costs, not holding costs. Keep them separate or you will double-count in MAO.
Interest carry — the big number
Hard money and most fix-and-flip loans are interest-only. You pay the rate on money that is out, not on a fully amortizing mortgage.
| Average balance | 10.5% IO / mo | 11% IO / mo | 12% IO / mo |
|---|---|---|---|
| $150,000 | $1,313 | $1,375 | $1,500 |
| $200,000 | $1,750 | $1,833 | $2,000 |
| $250,000 | $2,188 | $2,292 | $2,500 |
| $350,000 | $3,063 | $3,208 | $3,500 |
Per day at 11%: about $0.30 per $1,000 of balance. A $250,000 balance is roughly $75 per day. That is the number to remember when a slab is on backorder or a city inspection sits for ten days.
Draws change the monthly interest
You do not always pay interest on the full loan from day one. A typical structure: acquisition advance at close, rehab held back and released on draws.
| Month | Approx. outstanding | 11% interest |
|---|---|---|
| 1 (purchase in, rehab not drawn) | $140,000 | $1,283 |
| 2 (first draws) | $175,000 | $1,604 |
| 3 | $210,000 | $1,925 |
| 4 | $230,000 | $2,108 |
| 5 (listed, fully drawn) | $230,000 | $2,108 |
| 5-month interest | $9,028 |
Using “full loan × 11% × 5/12” from month one overstates interest if rehab is held back — and understates it if you model only the purchase advance. Build the month-by-month. Scope of work and draw timing are how you control this.
Taxes, insurance, utilities
Property tax
A $4,800 annual tax bill is $400 per month of hold. On Cook County and some DC/Maryland files, taxes are a larger share of hold than investors from low-tax states expect. Use the actual annual from the tax bill or assessor, not a national average.
Insurance
A vacant flip is not a homeowner policy. Budget vacant dwelling or builders risk. If you start demo, tell the carrier — coverage can fail silently. Cheap insurance that does not pay is not a hold-cost savings.
Utilities
Winter gas in a Chicago bungalow or a leaky ranch can exceed the electric bill. Keep heat on to protect pipes; a freeze is a rehab line plus another month of hold. Summer vacancy still needs dehumidification in basements if you have opened walls.
Schedule is the hold multiplier
Rehab duration is a hold decision. That is why kitchen cabinet lead times and bath tile jobs show up in this cluster.
| Project type | Typical calendar | Hold risk |
|---|---|---|
| Cosmetic / occupied-to-vacant refresh | 6–10 weeks | Low if materials in stock |
| Mid-range kitchens + baths | 3–5 months | Cabinet and stone lead times |
| Full gut + permits | 5–8 months | Inspections and MEP |
| Plus list and close | +30–75 days | DOM and buyer financing |
A minor kitchen that finishes in three weeks vs a gut that adds five weeks is not only a rehab-dollar decision. At $75 per day on a mid-size balance, five weeks is about $2,600 of interest, plus tax and insurance.
Same logic in baths: a tub-to-shower conversion that waits on a custom pan is hold. A stock tub-surround is calendar.
Worked example: 5-month mid-range flip
$125,000 purchase, $71,300 rehab, ~$176,000 average outstanding, 11% IO, $3,600 annual tax, $180/mo insurance, $220/mo utilities.
| Hold line | 5 months |
|---|---|
| Interest (approx.) | $8,100 |
| Property tax | $1,500 |
| Insurance | $900 |
| Utilities + yard | $1,350 |
| Hold total | $11,850 |
| Per month | $2,370 |
| Per day | $78 |
Add 45 extra list days after a price cut: +$3,510. That cut often happens because ARV was the trophy sale — see how to calculate ARV.
Put $11,850 in the P&L and in the safer MAO: (ARV × 0.70) − rehab − hold. Run the full file in the fix-and-flip calculator.
How hold should change the offer
Two houses, same ARV $300,000, same rehab $55,000.
| Fast cosmetic (3 mo) | Permit gut (7 mo) | |
|---|---|---|
| Hold stack | $7,200 | $18,500 |
| Classic MAO | $155,000 | $155,000 |
| Hold-adjusted MAO | $147,800 | $136,500 |
The gut is not “the same deal with more work.” It is an $18,700 cheaper max purchase if you want the same profit air. Investors who use one MAO for every scope are the ones who “don’t know why this one didn’t pay.”
Extension fees and the real blowup
If the loan term is 12 months and you are in month 11 still waiting on a buyer, hold is no longer the modeled stack. Extension fees (often points or a rate bump) plus another 30–90 days of the full monthly stack are the expensive version of optimism.
Prevention is boring and effective:
- Order long-lead cabinets and slabs at closing — kitchen cost and countertop cost
- Permit early on any moved plumbing (bath adds, kitchen guts)
- Price ARV at the median so you are not the 70-day listing
- Keep a 15%–20% rehab contingency so demo surprises do not steal a month of debate
Taxes at closing vs taxes as hold
Buyers sometimes “credit” a tax proration at purchase and forget that you still accrue tax every day you own the house. The proration settles the seller’s share. Your months are hold. The same is true on the sale: the next buyer prorates against you. Model the months you will actually own, not the tax line on the HUD from the purchase.
In high-tax counties, five months of tax can exceed utilities for the whole project. Pull the bill during due diligence and put monthly tax on the deal sheet next to interest. If the assessor is in a reassessment year, last year’s bill can be low — another reason city-level guides matter on Chicago and DC files.
Common holding-cost mistakes
- Modeling interest on the wrong balance — full loan vs actual outstanding
- Forgetting the list-and-close tail — rehab end is not sale
- Homeowner insurance on a vacant gut — claim risk
- Ignoring winter utilities in the Midwest and Mid-Atlantic
- HOA approval or estoppel adding two weeks you did not model
- Counting points as hold — points are a close cost; do not hide them in monthly carry
- Winning a bidding war, then running a 7-month gut on a 3-month hold model
Copy-ready hold block for your deal sheet
| Input | Your number |
|---|---|
| Expected months (rehab + list + close) | |
| Average outstanding balance | |
| Annual interest rate | |
| Monthly interest | balance × rate ÷ 12 |
| Monthly tax | annual ÷ 12 |
| Monthly insurance | quote |
| Monthly utilities + yard + HOA | |
| Monthly stack | sum |
| Total hold | monthly × months |
| Per-day burn | monthly ÷ 30 |
Paste the total hold into MAO and into the calculator. If the deal only works at three months and the scope is a permitted gut, the deal does not work.
Related guides
- 70% rule and maximum allowable offer
- How to estimate rehab costs
- How to calculate ARV
- Average fix-and-flip rehab costs
- Scope of work templates
- Fix-and-flip loan basics
Jaken Finance Group provides fix-and-flip financing with interest-only rehab holdbacks. Model carry before you lock the purchase.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.
Fix-and-Flip Holding Costs — next step (2026)
Price the months, not just the materials — a $75-a-day clock belongs in the offer.
Submit scenario · Pre-qualify · (833) 264-7776.