BRRRR Calculator

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market value, renovate it to force appreciation, place a tenant, then refinance into a long-term mortgage based on the new, higher appraised value. If the refinance loan is large enough, it repays most or all of your purchase and rehab costs, freeing that cash to buy the next property while you keep the rental.

The key number is cash left in the deal: your all-in cost (purchase, rehab, closing and holding costs) plus refinance closing costs, minus the new loan. If it's zero or negative, you've recovered all your capital — sometimes called an infinite return, because any cash flow is earned on none of your own money. The refinance loan is the after-repair value (ARV) times the lender's maximum loan-to-value, commonly 70–80% for investment property.

Three things decide whether a BRRRR succeeds. First, the purchase must be cheap enough relative to ARV; many investors aim for an all-in cost at or below 75% of ARV so a 75% LTV refi returns everything. Second, the appraisal must support your ARV — base it on recent comparable sales, not hope. Third, the rental must still cash-flow with the bigger refinanced loan. A deal that returns all your cash but loses money every month isn't a win.

Watch the interest rate on the refinance: higher rates shrink cash flow quickly. Also budget for seasoning periods, during which you carry short-term financing costs. Our house flipping calculator helps if you decide to sell instead of hold, and the cap rate calculator shows the stabilized return.

Buy a house for $120,000, spend $40,000 on rehab, $4,000 on closing and $3,000 on holding costs: $167,000 all-in. After renovation it appraises at $220,000. A 75% LTV refinance gives a $165,000 loan; after $4,000 of refi costs, $6,000 of your money remains in the deal. At 7% over 30 years the new payment is about $1,098. With $1,800 rent, 5% vacancy and $500 of expenses, cash flow is about $112 a month — roughly a 22% cash-on-cash return on the $6,000 left in, with $55,000 of equity.