The full cost stack, not just purchase and sale price
Purchase price, rehab budget (with contingency), carrying costs (tax, insurance, utilities, financing) for the full renovation period, and selling costs (commission, closing) all have to come out of the resale price before there's real profit left.
Why the resale estimate has to be conservative
Using the best comparable sale instead of a realistic average resale price is the most common way a flip's projected margin evaporates once the actual sale closes months later in a market that may have shifted.
The timeline risk that's easy to underestimate
Every month a renovation runs long is a month of carrying costs eating into margin that was already thin on paper — building a schedule buffer into the budget matters as much as the material costs themselves.