https://lv5capital.com/assets/ROICalculator-CBDSEUyn.js

1import{r as a,j as e,S as C,L as i}from"./index-pnw7vN9z.js";import{c as O,C as N}from"./CalculatorLayout-CZgIWJmU.js";import{L as P}from"./LearnFAQ-S_ij0azF.js";import{C as q,b as F,c as T,a as L}from"./card-DYfi2lB_.js";import{I as s}from"./input-CU8NR_7l.js";import{L as r}from"./label-BsF_0be7.js";import{T as A}from"./trending-up-CeXbOOsm.js";import"./Footer-BJxCwxzn.js";import"./button-B9_AU6ak.js";import"./calculator-BUITlVlJ.js";import"./arrow-right-BbVATkcx.js";import"./calendar-BgtdynmJ.js";import"./accordion-B4JB8Pp_.js";import"./index-CPIMHoWU.js";const S=[{question:"What is real estate ROI?",answer:"Return on investment (ROI) for real estate is the total profit you earn on a property divided by the total cash you put in. It rolls cash flow, principal paydown, and appreciation into one percentage so you can compare different investments. ROI does not account for the timing of cash flows — for that, use IRR."},{question:"How is ROI calculated on a rental property?",answer:"Total Profit = (Sale Proceeds − Selling Costs − Loan Payoff) + Cumulative Cash Flow − Total Cash Invested. ROI = Total Profit ÷ Total Cash Invested. Total Cash Invested usually includes down payment, closing costs, and rehab capital. Annualized ROI divides cumulative ROI by the hold period in years."},{question:"What is a good ROI on real estate?",answer:"Direct multifamily owners often target 12–20% annualized ROI on a value-add deal over a 5–7 year hold. Stabilized core properties may target 8–12%. Passive Limited Partner ROIs commonly target 14–18% annualized when measured as IRR on a 5–7 year hold. Returns vary by market, leverage, sponsor execution, and risk profile."},{question:"Does ROI include appreciation?",answer:"Yes. A complete ROI calculation includes ongoing cash flow during the hold, principal paydown on the mortgage, and the gain on sale (which captures appreciation). Excluding appreciation gives you only the cash-on-cash return — a more conservative number that ignores any equity buildup."},{question:"ROI vs. cash-on-cash return — what's the difference?",answer:"Cash-on-cash return is just annual cash flow ÷ cash invested. It ignores appreciation, principal paydown, and the eventual sale. ROI includes all of those. Cash-on-cash is best for comparing year-1 income; ROI (or IRR) is best for measuring total wealth created."},{question:"What is the difference between ROI and IRR?",answer:"ROI is a single, time-blind percentage. IRR (Internal Rate of Return) accounts for when cash flows arrive: $10K returned in Year 1 is worth more than $10K returned in Year 7. For multi-year hold real estate deals, IRR is the more accurate return metric. Many sponsors quote both to give a complete picture."},{question:"Why does leverage increase ROI?",answer:"When you put down 25–30% and borrow the rest at fixed rates, the property's gross appreciation is calculated on the full purchase price, but the gain accrues to your equity slice. A 3% appreciation on a $5M property is $150K — and on $1.25M of equity that's a 12% boost from appreciation alone. Leverage amplifies both gains and losses."},{question:"How does an LV5 Capital syndication generate ROI?",answer:"LV5 Capital's multifamily syndications generate Limited Partner ROI through three channels: monthly cash distributions during the hold, accelerated depreciation passed through on a K-1 (which shelters distribution income), and a capital event at sale or refinance. Most offerings target a 6–9% preferred return and a 1.7x–2.2x equity multiple over 5–7 years."}];function G(){const[o,f]=a.useState(1e6),[l,y]=a.useState(25),[d,v]=a.useState(3),[c,j]=a.useState(0),[u,b]=a.useState(28e3),[h,R]=a.useState(3),[p,w]=a.useState(5),[m,I]=a.useState(6),n=a.useMemo(()=>O({purchasePrice:o,downPaymentPercent:l,closingCostsPercent:d,rehab:c,annualCashFlow:u,appreciationPercent:h,holdYears:p,sellingCostsPercent:m}),[o,l,d,c,u,h,p,m]),g=t=>new Intl.NumberFormat("en-US",{style:"currency",currency:"USD",maximumFractionDigits:0}).format(t),x=t=>`${t.toFixed(2)}%`;return e.jsxs(N,{currentPath:"/calculator/roi",children:[e.jsx(C,{title:"Real Estate ROI Calculator | Free Investment Return Tool | LV5 Capital",description:"Free real estate ROI calculator. Estimate your total return on investment, annualized ROI, and equity multiple on rental property and multifamily deals.",path:"/calculator/roi"}),e.jsx("p",{className:"text-primary font-medium text-sm tracking-wider up

1percase mb-2","data-testid":"text-calc-label",children:"Investor Tools"}),e.jsx("h1",{className:"text-3xl md:text-4xl font-bold mb-6","data-testid":"text-calc-title",children:"Real Estate ROI Calculator"}),e.jsx("p",{className:"text-xl text-muted-foreground mb-8 font-body leading-relaxed","data-testid":"text-calc-intro",children:"Quickly estimate the total return on investment (ROI) for a rental or multifamily real estate deal. Enter the purchase, financing, cash flow, and exit assumptions below to see your total profit, annualized ROI, and equity multiple over the hold period."}),e.jsxs(q,{className:"not-prose border-border/50 mb-10","data-testid":"card-roi-calculator",children:[e.jsx(F,{children:e.jsxs(T,{className:"flex items-center gap-2 font-heading",children:[e.jsx(A,{className:"w-5 h-5 text-primary"}),"ROI Inputs"]})}),e.jsxs(L,{children:[e.jsxs("div",{className:"grid md:grid-cols-2 gap-4",children:[e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Purchase Price ($)"}),e.jsx(s,{type:"number",value:o,onChange:t=>f(parseFloat(t.target.value)||0),"data-testid":"input-purchase-price"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Down Payment (%)"}),e.jsx(s,{type:"number",value:l,onChange:t=>y(parseFloat(t.target.value)||0),"data-testid":"input-down-payment"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Closing Costs (%)"}),e.jsx(s,{type:"number",value:d,onChange:t=>v(parseFloat(t.target.value)||0),step:.5,"data-testid":"input-closing-costs"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Rehab / CapEx ($)"}),e.jsx(s,{type:"number",value:c,onChange:t=>j(parseFloat(t.target.value)||0),"data-testid":"input-rehab"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Annual Cash Flow ($)"}),e.jsx(s,{type:"number",value:u,onChange:t=>b(parseFloat(t.target.value)||0),"data-testid":"input-annual-cash-flow"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Annual Appreciation (%)"}),e.jsx(s,{type:"number",value:h,onChange:t=>R(parseFloat(t.target.value)||0),step:.25,"data-testid":"input-appreciation"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Hold Period (Years)"}),e.jsx(s,{type:"number",value:p,onChange:t=>w(parseInt(t.target.value)||1),min:1,"data-testid":"input-hold-years"})]}),e.jsxs("div",{className:"space-y-2",children:[e.jsx(r,{children:"Selling Costs (%)"}),e.jsx(s,{type:"number",value:m,onChange:t=>I(parseFloat(t.target.value)||0),step:.5,"data-testid":"input-selling-costs"})]})]}),e.jsxs("div",{className:"mt-8 grid md:grid-cols-3 gap-4",children:[e.jsxs("div",{className:"p-4 rounded-lg bg-muted/30",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Total Cash Invested"}),e.jsx("div",{className:"text-xl font-bold text-foreground","data-testid":"result-total-invested",children:g(n.totalInvested)})]}),e.jsxs("div",{className:"p-4 rounded-lg bg-muted/30",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Total Profit"}),e.jsx("div",{className:"text-xl font-bold text-foreground","data-testid":"result-total-profit",children:g(n.totalProfit)})]}),e.jsxs("div",{className:"p-4 rounded-lg bg-muted/30",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Equity Multiple"}),e.jsxs("div",{className:"text-xl font-bold text-foreground","data-testid":"result-equity-multiple",children:[n.equityMultiple.toFixed(2),"x"]})]}),e.jsxs("div",{className:"p-4 rounded-lg bg-primary/10",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Total ROI"}),e.jsx("div",{className:"text-2xl font-bold text-primary","data-testid":"result-total-roi",children:x(n.totalROI)})]}),e.jsxs("div",{className:"p-4 rounded-lg bg-primary/10",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Annualized ROI"}),e.jsx("div",{className:"text-2xl font-bold text-primary","data-testid":"result-annualized-roi",children:x(n.annualizedROI)})]}),e.jsxs("div",{className:"p-4 rounded-lg bg-muted/30",children:[e.jsx("div",{className:"text-sm text-muted-foreground",children:"Cumulative 

1Cash Flow"}),e.jsx("div",{className:"text-xl font-bold text-foreground","data-testid":"result-cumulative-cash-flow",children:g(n.cumulativeCashFlow)})]})]}),e.jsx("p",{className:"text-xs text-muted-foreground mt-4",children:"Estimates are illustrative only and use a simplified loan balance assumption. Actual returns depend on financing, amortization, market conditions, sponsor execution, and tax treatment. Not investment advice."})]})]}),e.jsx("h2",{children:"What is Real Estate ROI?"}),e.jsx("p",{children:'Return on investment (ROI) is the most common way real estate investors measure how a deal performed. At its simplest, it answers a single question: "For every dollar I put in, how many dollars did I get back?" On a rental property, the dollars in are your down payment, closing costs, and any rehab budget. The dollars out are the cash flow you collect each year plus the net proceeds when you sell or refinance.'}),e.jsxs("p",{children:["ROI gets quoted in two flavors. ",e.jsx("strong",{children:"Total ROI"})," is the cumulative profit over the entire hold divided by your invested capital. ",e.jsx("strong",{children:"Annualized ROI"})," divides that number by the years held, which makes it easier to compare deals with different hold periods. Both numbers ignore the timing of cash flows — for a deeper view that accounts for early vs. late distributions, see our ",e.jsx(i,{href:"/calculator/irr",children:"real estate IRR calculator"}),"."]}),e.jsx("h2",{children:"The ROI Formula for Rental Property"}),e.jsx("p",{children:"The full formula behind this calculator is straightforward, but it has more moving parts than the textbook version you may have seen."}),e.jsxs("div",{className:"not-prose bg-muted/30 rounded-lg p-6 my-6",children:[e.jsx("p",{className:"font-heading font-semibold text-foreground mb-3",children:"Real Estate ROI Formula"}),e.jsxs("ul",{className:"space-y-2 text-sm font-body text-muted-foreground",children:[e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Total Cash Invested"})," = Down Payment + Closing Costs + Rehab"]}),e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Cumulative 

1Cash Flow"})," = Annual Cash Flow × Years Held"]}),e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Future Property Value"})," = Purchase Price × (1 + Appreciation %)",e.jsx("sup",{children:"Years"})]}),e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Net Sale Proceeds"})," = Future Value − Selling Costs − Loan Balance"]}),e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Total Profit"})," = Cumulative Cash Flow + Net Sale Proceeds − Cash Invested"]}),e.jsxs("li",{children:[e.jsx("strong",{className:"text-foreground",children:"Total ROI"})," = Total Profit ÷ Total Cash Invested"]})]})]}),e.jsx("p",{children:"For simplicity, this calculator approximates the loan payoff at the original loan amount. In a fully amortized deal, you'd subtract the actual remaining principal — which is typically 90–95% of the original loan in years 5–7 of a 30-year mortgage. That small adjustment slightly improves true ROI through principal paydown."}),e.jsx("h2",{children:"What is a Good ROI in Real Estate?"}),e.jsx("p",{children:`There is no universal "good" number, because ROI depends on the deal type, market, leverage, and the level of risk you're underwriting. As rough benchmarks for direct multifamily ownership in the Midwest:`}),e.jsxs("ul",{children:[e.jsxs("li",{children:[e.jsx("strong",{children:"Stabilized core multifamily"})," — 8–12% annualized ROI, modest appreciation, low operational risk."]}),e.jsxs("li",{children:[e.jsx("strong",{children:"Value-add multifamily"})," — 12–20% annualized ROI, requires rehab capital, higher execution risk."]}),e.jsxs("li",{children:[e.jsx("strong",{children:"Opportunistic / heavy lift"})," — 20%+ annualized targets, with meaningful chance of underperformance."]}),e.jsxs("li",{children:[e.jsx("strong",{children:"Passive LP positions in syndications"})," — typically modeled as a 14–18% IRR over 5–7 years."]})]}),e.jsx("p",{children:"ROI alone doesn't tell you whether a deal is appropriately priced. A 25% projected ROI on a Class C asset in a declining market is more risky than a 12% projection on a stabilized Class B in a supply-constrained market. Always pair ROI with the deal's underlying assumptions."}),e.jsx("h2",{children:"How Leverage Drives ROI"}),e.jsx("p",{children:"Leverage is the single biggest reason real estate produces strong ROIs compared to other asset classes. When you put 25% down on a $1M property and the property appreciates 3% in a year, your equity grows by $30K — a 12% return on your $250K of equity, before you've collected a dollar of rent. Stack that on top of cash flow and principal paydown, and well-financed multifamily can deliver 15–20%+ annualized ROIs even in stable markets."}),e.jsx("p",{children:"Leverage works the other way too. A 3% drop in property value erases the same 12% of your equity. That is why sensible operators stress-test ROI under conservative rent, vacancy, and exit cap rate assumptions before signing on a deal — and why fixed-rate, long-amortization debt is generally preferred over short-term floating bridge debt."}),e.jsx("h2",{children:"ROI vs. Cap Rate, Cash-on-Cash, IRR, and Equity Multiple"}),e.jsx("p",{children:"Real estate has a confusing alphabet soup of return metrics. Each one answers a slightly different question, and sophisticated investors evaluate all of them together rather than relying on any single number."}),e.jsxs("ul",{children:[e.jsxs("li",{children:[e.jsx("strong",{children:"Cap Rate"})," — Net Operating Income ÷ Purchase Price. Measures the unleveraged yield of the property itself, ignoring financing and appreciation."]}),e.jsxs("li",{children:[e.jsx("strong",{children:e.jsx(i,{href:"/calculator/cash-on-cash",children:"Cash-on-Cash Return"})})," — Annual Cash Flow ÷ Cash Invested. The yield on your equity slice in a single year, ignoring appreciation."]}),e.jsxs("li",{children:[e.jsx("strong",{children:"ROI"})," — Lifetime profit ÷ cash invested. Includes appreciation and sale proceeds but ignores cash flow timing."]}),e.jsxs("li",{children:[e.jsx("strong",{children:e.jsx(i,{href:"/calculator/irr",children:"IRR"})})," — The annualized return that accounts for the timing of every cash flow. The most rigorous return metric for multi-year deals."]}),e.jsxs("li",{children:[e.jsx("strong",{children:e.jsx(i,{href:"/calculator/equity-multiple",children:"Equity Multiple"})})," — Total dollars returned ÷ dollars invested. Best for understanding total wealth created."]})]}),e.jsx("h2",{children:"Limitations of ROI"}),e.jsx("p",{children:"ROI is a great starting point but has real blind spots. It treats a dollar received in Year 1 the same as a dollar received in Year 7, even though the Year 1 dollar can be reinvested. It does not account for the tax treatment of cash flows vs. capital gains, which can swing after-tax results by 10–20 percentage points. And it relies on assumed appreciation and exit cap rates that may or may not materialize."}),e.jsx("p",{children:"For passive investors evaluating syndication offerings, ROI is best paired with IRR, equity multiple, and a careful review of the sponsor's track record, debt structure, and downside-case underwriting in the Private Placement Memorandum (PPM). Always consult a qualified attorney, CPA, and financial advisor before investing."}),e.jsx("h2",{children:"How LV5 Capital Models ROI on Multifamily Deals"}),e.jsx("p",{children:"LV5 Capital underwrites every multifamily acquisition with conservative ROI assumptions: in-place rents (not pro-forma), Trump-era cap rates 50–100 basis points above the going-in cap, fixed or capped debt, and full operating expense ratios that assume professional third-party management. Limited Partner ROI is then reported across three layers — preferred return, profit splits above the pref, and the capital event at sale or refinance."}),e.jsxs("p",{children:["Want to model a current LV5 Capital offering's projected ROI?"," ",e.jsx("a",{href:"https://crm.lv5capital.com/widget/bookings/jeff-dulmage-personal-calendar-fpv0anlem",target:"_blank",rel:"noopener noreferrer",children:"Schedule a call with the team"})," ","or learn more about ",e.jsx(i,{href:"/learn/multifamily-investing",children:"multifamily investing fundamentals"}),"."]}),e.jsx(P,{faqs:S,testIdPrefix:"roi"})]})}

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