## About Lofty

Lofty is a fractional U.S. real estate investing platform where visitors can browse property shares, learn about rental property investing, review calculators and guides, and access support for marketplace orders and account activity.

## Fix and Flip Calculator

Model a flip from purchase to resale: rehab, holding, and hard-money costs, net profit at the ARV, ROI on cash invested, the 70% rule check, and the sale price where you break even.

### Your numbers

- **Property**
  - Purchase price
  - Purchase closing costs
  - Rehab budget
  - After repair value (ARV)
  - Expected resale price after renovation.
  - Holding period months

- **Sale**
  - Selling costs %

- **Expenses**
  - Monthly holding costs

- **Financing**
  - Loan % of purchase
  - Interest rate %
  - Points %

## What is a fix and flip calculator?

A fix and flip calculator estimates the net profit on a renovation resale by subtracting purchase, rehab, holding, financing, and selling costs from the after repair value (ARV). It also checks the deal against the 70% rule, pay no more than 70% of ARV minus rehab costs, and converts profit into ROI and an annualized return based on the holding period.

## What your scenario is telling you

### Healthy profit cushion

Projected net profit of $42,563 leaves room to absorb a rehab overrun or a slower sale.

### Slightly above the 70% rule max offer

The 70% rule caps the offer at $162,000 and the price is $170,000. Within about 5% is workable in competitive markets, but the cushion is thinner than the classic buy box.

### Strong return on cash

ROI of 42% on invested cash clears the 20%+ bar most flippers target per project.

## How investors usually read these numbers

| Metric                | Often strong                               | Watch out               | Why it matters                                    |
|-----------------------|--------------------------------------------|-------------------------|---------------------------------------------------|
| Net profit            | $30,000+ or 10%+ of ARV                   | Below $15,000          | Thin paper margins get eaten by surprises.        |
| ROI on cash           | 20% to 40%+ per project                   | Below 10%              | Flip returns must compensate for various risks.   |
| 70% rule             | Purchase at or below 0.70 x ARV - rehab   | More than 5% above the max offer | Overpaying at purchase is the number-one cause of losing flips. |
| Holding period        | Under 6 months                             | Over 9 months           | Every month adds holding and interest costs.      |
| Financing cost        | Under 8% of project cost                   | Above 12%              | Points plus double-digit interest compound quickly.|

## How to run a fix and flip analysis

1. Enter purchase price and closing costs
   - Use your contract price and typical buyer closing costs for the market.

2. Budget the rehab and set the ARV
   - Get contractor bids for the rehab and pull sold comps for the ARV.

3. Set the holding period and monthly costs
   - Typical flips run 4 to 9 months from purchase to resale.

4. Add financing terms
   - Hard money typically funds 80% to 90% of purchase at 10% to 12% interest-only plus 1 to 3 points.

5. Set selling costs
   - Agent commissions plus seller closing costs usually total 6% to 8% of the resale price.

6. Read profit, ROI, and the 70% rule check
   - Review net profit, ROI on cash, annualized return, and the break-even sale price.

## The math behind the result

### Core formulas

- Loan amount = purchase price x loan % of purchase.
- Financing cost = loan x points % + loan x interest rate x (holding months / 12).
- Total project cost = purchase + closing costs + rehab + holding costs + financing cost + selling costs (% of ARV).
- Net profit = ARV - total project cost.
- Cash invested = down payment + closing costs + rehab + holding costs + financing cost.
- ROI on cash = net profit / cash invested.

### Expert takeaways
- Accuracy is key; pad rehab budgets and rely on solid comps.
- The 70% rule provides a safety margin; in highly competitive markets, some stretch to 75%-80%.
- Timely execution is crucial; every extra month adds costs.
- Understanding taxes on profits is fundamental; budget accordingly.

## Key terms in plain English

- **ARV**: Expected resale price after repairs.
- **70% rule**: Max offer calculation for flippers.
- **Hard money loan**: Short-term funding option primarily based on property value.
- **Break-even sale price**: The price at which all costs are covered.