BRRRR Calculator guide
Model buy, rehab, rent, refinance, repeat: find out how much of your cash the refinance returns and what the property earns afterward.
BRRRR in one sentence
Buy a distressed property below value, Rehab it, Rent it, Refinance it at the new appraised value, and Repeat with the cash the refinance hands back. Done well, you end up owning a cash-flowing rental with little or none of your own money left in it.
The number that decides whether a BRRRR worked is cash left in the deal. Everything else (cash flow, cash-on-cash return, equity) follows from it.
The formulas
All-in cost = purchase price + purchase closing costs + rehab + holding costs for the months until refinance + interest on any purchase or rehab loan.
Refinance loan = after-repair value (ARV) × cash-out LTV. Most investment cash-out refinances cap at 70 to 75 percent LTV.
Cash left in deal = all-in cost − refinance loan + refinance closing costs. If a hard money loan funded part of the purchase, the refi pays it off first; the math comes out the same.
Monthly cash flow = rent after vacancy − operating costs − new principal and interest. Cash-on-cash return = annual cash flow ÷ cash left in deal. If cash left is zero or negative, the return is infinite: you own the property with none of your money in it.
Max purchase price to recycle all your cash = refinance loan − refinance closing costs − (closing + rehab + holding). Run this before you make an offer, not after the appraisal.
Worked example: a $150,000 fixer
Purchase $150,000 in cash, $4,500 closing, $45,000 rehab, and 5 months of holding costs at $900 (taxes, insurance, utilities) = $4,500. All-in cost: $204,000.
It appraises at $260,000 after repairs. A 75 percent cash-out refi is a $195,000 loan, with $5,000 of closing costs. Cash left in deal = $204,000 − $195,000 + $5,000 = $14,000. You recovered about 93 percent of your cash.
The new loan at 7.25 percent for 30 years costs $1,330.24 a month. Rent is $2,300; after 5 percent vacancy and $690 of operating costs, NOI is $1,495. Cash flow: $164.76 a month, or $1,977 a year. Cash-on-cash = $1,977 ÷ $14,000 = 14.1 percent. You also hold $65,000 of equity.
To pull every dollar out, the purchase price needed to be $136,000 or less. Now say you financed $120,000 with a hard money loan at 11 percent interest-only. Five months of interest adds $5,500; your cash in drops to $89,500 during the project, but cash left after the refi rises to $19,500. Leverage frees capital during the rehab and costs you on the back end.
The 75 percent rule of thumb
Investors aim for an all-in cost at or below 75 percent of ARV, which matches the maximum cash-out LTV. The example is at 78.5 percent, which is why $14,000 stays in. The flipper's 70 percent rule is stricter because flippers also pay selling costs.
Where BRRRR deals go wrong
Optimistic ARV. The appraiser uses recent sold comps within a small radius, not your Zillow estimate. Pull three sold comps of similar size and finish before you buy.
Seasoning rules. Many lenders will not refinance on appraised value until you have owned the property 6 to 12 months; before that they cap the loan at your purchase price plus documented rehab. DSCR lenders are often more flexible. Ask before you close on the purchase.
Rehab overruns. Budget a 10 to 20 percent contingency. A $45,000 rehab that becomes $55,000 raises cash left in the deal by $10,000.
Longer holding periods. Every extra month of permits, contractors, or vacancy adds holding costs and hard money interest.
Refinancing into negative cash flow. The bigger the cash-out loan, the higher the payment. A deal that returns all your cash but loses $200 a month is not a win. Keep DSCR above 1.2 if you can.
How we calculate: sources
Frequently asked questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. You buy a property below value, fix it, rent it, then do a cash-out refinance at the new value to recover your cash for the next deal.
How do you calculate cash left in a BRRRR deal?
Cash left = all-in cost (purchase, closing, rehab, holding, and loan interest) − cash-out refinance loan + refinance closing costs.
What LTV do lenders allow on a cash-out refinance of a rental?
Commonly 70 to 75 percent of appraised value for investment properties. Some DSCR lenders go to 75 or 80 percent at higher rates.
What is the 75 percent rule in BRRRR?
Keep your all-in cost at or below 75 percent of after-repair value, so a 75 percent LTV refinance returns all of your cash.
Is there a seasoning period before a cash-out refinance?
Often yes. Many conventional lenders require about 6 months of ownership before using the new appraised value; some DSCR lenders are more flexible. Ask before you buy.
What if cash left in the deal is negative?
The refinance returned more than you put in. Cash-on-cash return is infinite, but check that rent still covers the larger loan payment.
Are my numbers saved or uploaded?
Everything runs in your browser. Nothing you enter is uploaded to a server or stored by us.
What does cash left in the deal mean?
The money you still have tied up after the cash-out refinance: all-in cost minus the refinance loan plus refinance closing costs. Zero or negative means you pulled out everything you put in.