Calculate novation deal profit split between you and the seller. Model total profit, your share, seller share, and upside if sale exceeds ARV.
📍 Property Address (optional)
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InputsYour Numbers
Deal Structure
Contract Price (from seller)?
$
After-Repair Value (ARV)?
$
Estimated Repairs?
$
Profit Split
Seller Share of Profit %?
%
Your Share of Profit %?
%
Deal Costs
Holding / Rehab Costs?
$
Selling Closing Costs?
$
Pro Forma (Higher Sale Price)
Higher Sale Price?
$
As-Is AnalysisCurrent
Enter values to see results
Your Net Profit
--
your share
Seller Net Profit
--
seller share
Total Net Profit
--
combined
Your ROI
--
on costs invested
Novation Profit Calculation
Sale Price (ARV)--
Contract Price to Seller--
Repair Costs--
Holding Costs--
Selling Costs--
Total Net Profit--
Profit Split
Your Share--
Seller Share--
Total Distributed--
Pro FormaAfter Plan
Enter pro forma values
Your Profit (Higher Sale)
--
if ARV exceeds estimate
Seller Profit (Higher Sale)
--
seller also wins
Extra You Get
--
vs base case
Extra Seller Gets
--
vs base case
Higher Sale Price Comparison
Base Case Your Profit--
Higher Sale Your Profit--
Upside If Sale Exceeds Estimate--
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1
Enter Contract Price
What you agreed to pay the seller. In a novation, the seller is being substituted out of the original purchase contract and you take over.
2
Enter ARV and Repairs
Your total investment thesis: buy at contract price, repair to ARV, sell for ARV. All costs including rehab and selling expenses reduce the profit pool.
3
Set the Split
Negotiate the profit split with the seller. The split compensates the seller for contributing the property while you bring capital and execution. Common splits: 50/50 to 70/30 (your favor).
4
Check Your Profit
Your share of net profit. Make sure it's worth your capital risk and management time. Target $15-25K+ minimum for the effort involved.
5
Seller Share Analysis
The seller receives their split even though they didn't fund the rehab. This is the novation value proposition -- seller gets more than a discounted wholesale price.
6
Model Upside
If the property sells above ARV, both parties benefit at the split ratio. Enter a higher sale price to see the upside scenario.
A novation (or novation agreement) substitutes one party in a contract with another. In real estate, it's used to take over a seller's purchase contract and share the renovation profit. You control the property, fund the rehab, manage the project, and split the proceeds with the original seller.
Unlike wholesaling (where you assign the contract for a fee), novation involves actually completing the renovation and selling at ARV. Unlike a typical flip (where you own the property), novation uses a contractual arrangement instead of a deed transfer, which can reduce certain costs and complexities.
Novation deals require precise legal documentation -- use an experienced real estate attorney to structure the agreement, document the profit split, and handle the title transfer properly.