BRRRR Calculator
Buy, rehab, rent, refinance, repeat. Enter the purchase, rehab budget and after-repair value to see how much cash stays in the deal after the refinance and what that cash earns.
After the refinance
Worked example
You buy a dated three-bedroom house for $120,000, pay $4,500 in closing costs and put $35,000 into the rehab. Your all-in cost is $120,000 + $35,000 + $4,500 = $159,500.
After the work, the house appraises at $210,000. A cash-out refinance at 75% loan-to-value gives a new loan of $157,500. The refinance itself costs $5,000. Cash left in the deal is $159,500 - $157,500 + $5,000 = $7,000.
The house rents for $1,950 a month. At 95% occupancy and a 35% expense ratio, net operating income is about $14,450 a year. The new loan at 7.25% over 30 years costs $1,074 a month, or $12,893 a year, leaving $1,556 of annual cash flow. That is a 22.23% cash-on-cash return on the $7,000 still in the deal, and you own $52,500 of equity.
How the BRRRR method works
BRRRR stands for buy, rehab, rent, refinance, repeat. You buy a property that needs work for less than it will be worth once fixed, usually with cash, a hard money loan or a private loan. You renovate it, place a tenant, and then refinance into a long-term mortgage based on the new, higher appraised value. The refinance pays off the short-term money and returns some or all of your cash, which you use on the next property.
Done well, you end up owning a rental with little or none of your own cash left in it. Done badly, you end up with a property that cost more than it appraises for and a refinance that leaves most of your money trapped. Our BRRRR step-by-step guide covers each stage in more detail.
The formulas this calculator uses
- All-in cost = purchase price + rehab + purchase closing costs.
- Refinance loan = after-repair value x loan-to-value.
- Cash left in the deal = all-in cost - refinance loan + refinance costs.
- Annual cash flow = net operating income - annual payments on the new loan. NOI is gross rent times occupancy, minus operating expenses.
- Cash-on-cash return = annual cash flow / cash left in. If the cash left in is zero or negative, you pulled out all your money or more, and the return is shown as infinite.
The calculator assumes you bought with your own cash. If you used a hard money loan, add its points, interest and fees to the closing costs or rehab budget so the all-in cost reflects what the project really cost you.
Getting the after-repair value right
Everything in a BRRRR deal depends on the appraisal. Base your after-repair value on recent sales of renovated homes nearby with similar size, bedrooms, bathrooms and lot, not on list prices or online estimates. Appraisers lean on the last six months of closed sales within a short distance, so check those yourself before you buy.
A common rule is to keep the all-in cost at or below 75% of ARV. In the example, $159,500 is 76% of $210,000, so a 75% loan-to-value refinance returns almost all the cash. If the appraisal comes in $15,000 low, the refinance loan drops by $11,250 and that much more of your money stays in the deal.
Refinance rules that trip people up
Many lenders have a seasoning period, a minimum time you must own the property before they will lend on the new appraised value rather than your purchase price. Six to twelve months is common for conventional loans. Some DSCR and portfolio lenders will lend on value sooner. Ask about seasoning, maximum cash-out loan-to-value and minimum DSCR before you buy, not after the rehab.
The new loan also has to pass the lender's coverage test. If rent will not support the payment on a 75% loan, the lender will cut the loan amount. Check the deal in the DSCR calculator with the refinance loan amount from this page.
When BRRRR does not work
The method depends on a wide gap between purchase price plus rehab and the finished value. In hot markets where distressed homes sell close to retail, that gap disappears. High interest rates squeeze it from the other side: a larger payment on the refinance loan can turn cash flow negative even when the appraisal is strong. Rehab overruns, longer vacancy and holding costs during the project all eat into the margin. Run a pessimistic version with a lower ARV, a higher rate and a 15% to 20% rehab contingency, and only buy if that version still works.
Frequently asked questions
What does BRRRR stand for?
Buy, rehab, rent, refinance, repeat. You buy a property below its potential value, fix it, rent it, refinance based on the higher value to pull your cash back out, and use that cash on the next deal.
How do you calculate cash left in a BRRRR deal?
Cash left in = (purchase price + rehab + closing costs) - refinance loan + refinance costs. The refinance loan is the after-repair value times the lender's loan-to-value limit.
What does an infinite return mean?
If the refinance returns all of your cash or more, you have no money left in the deal, so dividing cash flow by cash invested has no finite answer. Any positive cash flow is a return on zero dollars.
What LTV do lenders allow on a cash-out refinance?
For investment properties, cash-out refinances commonly top out around 70% to 75% loan-to-value. Some DSCR and portfolio lenders go to 80% at a higher rate. Check with your lender before you buy.
What is the 75% rule in BRRRR?
Many investors aim for an all-in cost of no more than 75% of the after-repair value. At that level, a 75% LTV refinance returns roughly all of your cash, before refinance costs.
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Results are estimates for education only, not financial, tax or legal advice. Check numbers with your lender and advisors before you buy.