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BRRRR Calculator

Buy, rehab, rent, refinance: see how much cash stays in the deal and whether it still cash-flows.

How it works

The strategy works by forcing appreciation: buy below value, renovate, and refinance against the new appraised value. The refinance loan is a percentage of the after-repair value, not of what you paid, so a good deal hands most or all of your cash back. That cash goes into the next property, which is the 'repeat'. The catch is that a bigger loan means a bigger mortgage, and the rent still has to cover it once vacancy, repairs and management are paid.

cash left in = (purchase + rehab + holding) − ARV × LTV × (1 − refi costs) cash flow = rent × (1 − operating %) − fixed costs − mortgage
ARV
After-repair value, what the appraiser says it is worth renovated
LTV
Loan-to-value, usually capped at 70–75% for investor cash-out refinances
operating %
Vacancy, management, maintenance and capex, as a share of rent
cash-on-cash
Annual cash flow divided by the cash still in the deal

Worked example

A $120,000 house needing a $45,000 rehab, with $12,000 of closing and holding costs. It appraises at $230,000 and rents for $2,200.

  1. 1All-in cost: 120,000 + 45,000 + 12,000 = $177,000
  2. 2New loan at 75% LTV: 230,000 × 0.75 = $172,500
  3. 3Cash back after 2.5% refinance costs: 172,500 × 0.975 = $168,188
  4. 4Cash left in the deal: 177,000 − 168,188 = $8,813
  5. 5Mortgage at 6.75% over 30 years: $1,119 a month
  6. 6Cash flow: 2,200 × 0.70 − 350 − 1,119 = $71 a month

About $8,800 stays tied up for $71 a month, roughly a 9.7% cash-on-cash return, with $57,500 of equity left behind.

Frequently asked questions

What does BRRRR stand for?

Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property with cash or a short-term loan, renovate it, put a tenant in, then refinance into a long-term mortgage based on the higher renovated value. If the numbers work, the refinance returns most of your original cash, and you use it to do the same again.

What is a good amount of cash to leave in a BRRRR deal?

Many investors aim to leave nothing in, which makes the cash-on-cash return technically infinite. In practice, leaving 10–20% of the all-in cost is common, and still a strong result. What matters more is that the property cash-flows after the refinance. Pulling all your cash out of a property that loses money every month is not a win.

How long do I have to wait to refinance?

It depends on the lender. Conventional lenders usually want six to twelve months of ownership, called seasoning, before they will lend against the appraised value rather than the purchase price. DSCR and portfolio lenders are often more flexible, sometimes lending against the ARV as soon as the rehab is finished, usually at a higher rate.

What is the 70% rule, and does it apply here?

The 70% rule says to pay no more than 70% of the ARV minus the rehab cost. It is a quick screen that leaves room for holding costs and profit. It lines up with BRRRR because investor refinances are commonly capped at 70–75% LTV: if your all-in cost is under that cap, you can get your cash back. In the example, 70% of $230,000 minus $45,000 is $116,000, just under the $120,000 paid.

Why is 30% of rent a sensible operating expense figure?

It is a middle-of-the-road allowance for vacancy (5–8%), property management (8–10%), routine repairs (5–10%) and capital expenses like roofs and HVAC (5–10%). Older houses and cheaper neighbourhoods often run higher, and newer properties you manage yourself run lower. Leaving it out is the most common way BRRRR spreadsheets look better than reality.

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