San Francisco Fix and Flip ROI Basics for Investors

Running the numbers is what makes or breaks a San Francisco flip. If you miss on ARV, underestimate permits, or forget carrying costs, your margin can disappear fast. You want a clear, conservative framework that reflects how this city really works. In this guide, you will learn how to comp ARV, build a realistic scope and budget, plan for permits and inspections, and forecast carrying costs so you can estimate ROI with confidence. Let’s dive in.

ARV in San Francisco: Get comps right

Start with tight, recent comps

Use closed sales from the past 90 days when possible, and extend to six months if the market is thin. Match by micro-market first, not just neighborhood name. A few blocks can change value. Prioritize building type, bedroom and bathroom count, finished square footage, lot size, and parking. Parking has a meaningful impact in many central neighborhoods.

Cross-check with price per square foot

Price per square foot is a helpful cross-check, not a primary tool. Unit mix, lot characteristics, views, and parking create wide spreads in San Francisco. Rely on paired comps first, then use price per square foot to make sure your estimates are in range.

Make explicit adjustments

Start with the closest sale and add or subtract specific dollar adjustments for differences: bedrooms, baths, parking, condition, views, and permitted improvements such as additions or ADUs. Unpermitted work can depress value or trigger buyer re-negotiation. When in doubt, consult a local agent or appraiser to size adjustments for your micro-market.

Model base and best-case ARV

Build two ARV scenarios. The base case should be conservative and drive your offer. The best case can inform upside potential if finishes, views, or layout improvements outperform. Document why each comp was chosen and how you adjusted it so you can defend your number to lenders or partners.

Scope, budget, and contingency

Build a line-item budget

Create a detailed scope with hard and soft costs so you can price the work accurately and control change orders.

• Acquisition costs: purchase price, escrow and title fees, San Francisco transfer tax, and recording fees.
• Hard construction: demo, debris, structural and seismic, roofing and windows, interior finishes, electrical, plumbing, HVAC, and any site or exterior access work.
• Soft costs: permits and plan review, architecture and engineering, possible historic or soils consultants.
• Financing and carrying: interest, taxes, insurance, HOA, utilities, security.
• Sales and closing: broker commission, escrow and closing fees, pre-sale staging and marketing.
• Contingency and reserves: 10 to 20 percent of hard costs, plus a soft-cost or permit-risk reserve.

Sample budget (illustrative)

The example below is for a hypothetical single-family flip in San Francisco. Replace with your own bids and numbers.

• Purchase price: $1,200,000
• Acquisition fees, transfer tax, and closing: 1.5 to 2.5 percent of purchase price
• Renovation hard costs: $150 to $300 per square foot depending on scope and finishes
• Soft costs (design and permits): 5 to 10 percent of hard costs
• Contingency: 10 to 20 percent of hard costs
• Selling costs: 6 to 7 percent of sale price (commissions and closing)
• Carrying costs: see the carrying section below

Label these numbers clearly as illustrative. In San Francisco, labor and permit costs are typically higher than national averages, and specialized work like seismic retrofits or historic restoration can increase cost.

Permitted vs unpermitted work

Permitted structural, electrical, plumbing, and mechanical changes typically increase ARV and reduce buyer uncertainty. Unpermitted work can lead to price reductions or remediation. Verify permit history, open violations, and whether additions or finished basements were permitted.

Permits and inspections: Timelines to plan for

Simple vs complex projects

• Minor interior work that is limited in scope can move faster once permits are issued. Plan check and permit issuance are often 2 to 8 weeks for smaller permit-only projects.
• Moderate remodels that touch structure or systems may take 4 to 12 weeks in plan check, plus corrections.
• Major projects like additions, ADUs, or significant structural work can require multiple reviews and can take 3 to 9 months or more to obtain approvals.

Agencies and reviews to expect

Know the San Francisco Department of Building Inspection for permitting and inspections, the Planning Department for zoning and design review, and Department of Public Works if your project affects sidewalks or streets. Historic properties or design-controlled areas can add reviews and extend timelines. If the property is tenant-occupied, check Rent Board requirements for notices and possible relocation assistance.

Inspections and common delays

Inspections are scheduled as work progresses after permit issuance. Expect foundation, framing, electrical, plumbing, and final inspections. Failing an inspection means corrections and reinspection, which can push timelines. Additional delays often come from plan check revisions, historic or neighborhood review, and utility or sewer coordination.

Add buffer to your schedule

When estimating your hold period, add 25 to 50 percent to your optimistic permit and inspection timeline. This buffer protects your ROI against processing swings and reinspection delays.

Carrying costs and financing: Know your monthly burn

A simple monthly carrying formula

Monthly carrying = mortgage interest + property tax (annual tax divided by 12) + insurance (annual divided by 12) + HOA fees + utilities + security/site protection + routine maintenance + any interest reserve draw.

Interest-only rehab or hard-money loans can carry higher rates and fees and often shorter terms. Bank rehab products can offer lower rates but take longer to approve and have stricter underwriting. Lenders will underwrite against conservative ARV, so expect down payment and reserves.

Illustrative monthly range

For a $1.2 million single-family property in San Francisco, monthly carrying can be several thousand dollars to $10,000 or more depending on financing structure, insurance, HOA fees, and scope. Use your actual loan quotes, tax estimates, and utility projections to build a project-specific monthly number.

Hold-time sensitivity

Every extra month adds interest, taxes, and overhead. Build a quick sensitivity check using your monthly carrying number.

Example sensitivity (illustrative only):

• If your monthly carrying is $9,500:

Use this to weigh price adjustments, targeted marketing, or alternative exit strategies if your listing lingers. Do not assume a quick sale.

ROI: Three steps to a clear estimate

1) Forecast ARV

Use tight comps, make explicit adjustments for parking, views, condition, and permitted improvements, and model base and best-case values.

2) Build all-in project cost

Add acquisition fees, hard and soft construction, contingency, financing and carrying, and selling costs. In San Francisco, remember transfer tax and the mid-single-digit commission range.

3) Calculate ROI and stress test

Estimated profit = ARV minus total project cost. ROI on cash = estimated profit divided by total cash invested. Then stress test with lower ARV and longer hold periods. If profit holds under conservative assumptions, your deal is more resilient.

Risks and local realities to factor in

• Permitting delays and plan-check revisions can add time and cost.
• Seismic retrofit requirements and mandatory programs can expand scope.
• Tenant protections can affect timing and expenses for occupied properties.
• High Bay Area labor and material costs increase budgets and contingencies.
• Market shifts can change demand mid-project, so price and timing discipline matter.
• Title issues, easements, unpermitted work, or liens can stall closing or resale.
• Environmental hazards like asbestos or lead paint in older homes add testing and abatement steps.

Pre-offer due diligence checklist

• Pull tight comps from MLS and check historical sale prices.
• Verify title, deed, easements, and any existing permits or code violations.
• Inspect structure, seismic, roof, plumbing, electrical, and foundation. Get early contractor or engineer input on suspected major systems work.
• Verify tenant status, lease terms, and applicable Rent Board requirements if occupied.
• Confirm preliminary site constraints: access, staging, parking permits.
• Discuss closing, transfer tax, and timeline expectations with title and escrow.
• Build a contingency and hold-time buffer that reflects San Francisco timelines.

Bringing it all together

When you calculate ARV conservatively, itemize scope with realistic Bay Area costs, and plan for permitting and hold-time, you can make clearer, faster decisions. Your best protection is a documented analysis that you can defend and a schedule with buffer baked in. If the deal still pencils under base-case ARV and extended hold assumptions, you are positioned for a stronger outcome in the San Francisco or San Francisco–Redwood City–South San Francisco market.

If you want a second set of eyes on ARV, scope, or resale strategy, connect with a local advisor who blends brokerage tools with design and construction fluency. For end-to-end guidance from acquisition to resale, reach out to Kia Amini.

FAQs

What is a reliable way to estimate ARV for a San Francisco flip?

• Use recent closed comps from the same micro-market, adjust for parking, views, condition, and permitted improvements, and model base and best-case scenarios.

How much contingency should I carry in San Francisco rehab budgets?

• A 10 to 20 percent contingency on hard costs is common, with an additional reserve for soft-cost or permit risks.

How long do permits and inspections usually take in San Francisco?

• Minor permits can be 2 to 8 weeks, moderate projects 4 to 12 weeks, and major additions or ADUs can take 3 to 9 months or more.

What selling costs should I include when calculating ROI on a flip?

• Include broker commission, escrow and closing fees, staging and marketing, and any pre-sale repairs or touch-ups.

How do carrying costs affect flip profit in San Francisco?

• Each month adds interest, taxes, insurance, utilities, and other overhead, which directly reduces profit; build a sensitivity using your monthly carrying number.

Should I buy a tenant-occupied property to flip in San Francisco?

• Tenant protections and potential relocation requirements can add time and cost, so consult relevant rules and budget accordingly before you offer.