BRRRR Calculator

The BRRRR formula

Cash left in deal = cash invested − refinance proceeds. That single subtraction is the BRRRR strategy in one line: buy, rehab, rent, refinance, repeat, a loop where each deal is supposed to hand your capital back so the same dollars fund the next property.

Buy means acquiring below market value, usually with short-term financing. Rehab forces the appreciation: renovation lifts the property to its after-repair value instead of waiting on the market. Rent stabilizes it, a signed lease and documented income turn a project into collateral a lender will refinance.

Refinance is the payoff step. A cash-out loan at a percentage of the new appraised value pays off the short-term debt and returns whatever is left to you; the gap between what you put in and what comes back is the cash left in deal. Repeat only works when that gap is small. This calculator solves the whole loop live: cash left, equity created, refinance cash-out, post-refi cash flow and cash-on-cash, the 70% check, and a composite grade, every keystroke.

The denominator matters more than the return: a deal that recovers $94,100 of $101,800 invested leaves little trapped even at modest cash flow, while a deal that recovers half leaves the rest earning nothing until sale.

Worked example

Our default deal buys at $200,000, rehabs for $45,000, appraises at $363,000, and leaves $7,700 in after a 70% refinance. It cash flows $493 a month on the new loan and grades A. Here is how each step builds that result.

Buy: $200,000 price with 80% short-term financing means $160,000 borrowed and $40,000 down. Add $4,000 closing and the cash committed before rehab is $44,000.

Rehab and hold: $45,000 of renovation plus six months at $800 a month ($4,800) plus $8,000 of interest-only payments at 10% bring the all-in cost to $253,800 and total cash invested to $101,800.

Rent and refinance: $3,000 rent at 5% vacancy nets $2,850 against $667 a month of operating costs. A 70% refinance of the $363,000 ARV is a $254,100 loan; it pays off the $160,000 balance and returns $94,100, leaving $7,700 of the $101,800 behind.

Repeat math: the $1,691 refinance payment leaves $493 a month after expenses, a 76.8% cash-on-cash return on the $7,700 still in, and a 1.29× DSCR. All-in of $253,800 sits $300 under the $254,100 seventy-percent target, so the sheet grades A at 97 points. Change any input and every figure above recomputes; the example is the placeholder set in the form.

Worked example 2: a BRRRR that died at the refinance

The refinance is the bottleneck, not the rehab. Run the default deal again with one changed input: the comps come in soft and the appraisal lands at $280,000 instead of $363,000. Same purchase, same $45,000 rehab, same $101,800 of cash invested. Only the appraisal moved, and it takes the whole strategy with it.

The math of the miss. A 70% refinance of $280,000 is a $196,000 loan, not the planned $254,100. The missing $83,000 of ARV removes $58,100 of loan proceeds at 70% LTV. That loan still pays off the $160,000 hard money balance, but it returns only $36,000 of your $101,800. Cash left in deal: $65,800, up from the planned $7,700.

Here is the part that surprises people: the property itself is fine. The $196,000 loan at 7% costs about $1,304 a month, so cash flow actually rises to roughly $879 a month and coverage improves to 1.67×. The investor owns a good rental. What died is the BRRRR: $65,800 is still trapped, the repeat is unfunded, and deal number two waits on fresh capital.

The failure was visible at purchase. All-in of $253,800 sat $300 under the 70% ceiling of the hoped-for $363,000 ARV, but $57,800 above the 70% ceiling of the real one. The 70% rule only works when the ARV is real, which is why the comps deserve more skepticism than the rehab budget. The lesson: underwrite the refinance first, because the appraisal, not the hammer, decides whether your capital comes home.

Case study: a fourplex that recycled all capital

When every stage goes right, this is what the numbers look like. A fourplex buys at $240,000 with 80% hard money, so $192,000 borrowed and $48,000 down. Closing runs $3,500, the rehab $50,000, holding six months at $900 a month adds $5,400, and interest-only at 10% on the loan adds $9,600. Total cash in: $116,500.

The value lift: finished comps support a $445,000 ARV, and the all-in cost of $308,500 sits $3,000 under the 70% ceiling of $311,500. A 70% cash-out refinance is a $311,500 loan at 7% over 30 years, about $2,072 a month. It pays off the $192,000 hard money balance and returns $119,500, which is $3,000 more than the $116,500 invested. Cash left in deal: negative $3,000. Every dollar came home with $3,000 to spare.

The property after: four units at $1,150 each gross $4,600 a month. Five percent vacancy nets $4,370 against $950 of taxes, insurance, and maintenance, so NOI is $3,420 a month. After the $2,072 payment the investor banks $1,348 a month, and the DSCR on the new loan is a comfortable 1.65×.

Read the three numbers together. Negative cash left means the next deal can start without fresh capital. Positive $1,348 a month means the property pays for the debt it carries. A 1.65× DSCR means the lender approved it without hesitation. That is the whole strategy in one snapshot, and it only happened because the purchase price left room for everything to go wrong and still fit under 70%.

The five financing stages of a BRRRR

A BRRRR is not one loan, it is a financing relay, and each stage has its own debt. Knowing which loan covers which stage, and what has to be true before the handoff, is most of the planning.

Stages one and two share the same debt: purchase and rehab run on hard money or private money, built for speed and distressed property rather than cheap rates. The loan funds the buy, then rehab draws release against completed work. Some investors split stage two onto a separate construction loan, but most single the structure to keep one payoff to plan around.

Stage three is the wait. A signed lease and a seasoning clock, typically 6 to 12 months of ownership before a lender will base a loan on the new appraised value, turn the project into refinance collateral. Nothing new is borrowed here, but holding costs and interest-only payments keep running, which is why delay is expensive.

Stage four is the refinance: a DSCR or conventional cash-out loan sized against the appraised value, paying off the short-term balance and returning the remainder. Stage five is the repeat, where the returned cash becomes the down payment on the next purchase. The relay only continues when stage four returns most of what stages one and two consumed, which is why every number on this page exists: they measure the handoff.

The 70% rule

Pay no more than 70% of ARV, all costs included. Maximum allowable offer = ARV × 70% − rehab − closing − holding. On a $363,000 ARV that ceiling is $254,100 all-in; every dollar of purchase, rehab, closing, and holding must fit inside it.

The 30% gap is the lender's cushion, not yours. A cash-out refinance lends a percentage of appraised value, so the equity has to exist before the appraisal: buy at 70% all-in and a 70% loan returns nearly every dollar. Pay 85% all-in and the same loan covers the purchase while your rehab money stays trapped.

On this page's default deal the ceiling is exact: $254,100 minus $4,000 closing, $45,000 rehab, and $4,800 holding leaves a $200,300 maximum purchase, and the $200,000 price clears it by $300. Flippers often quote a shorter form, ARV × 70% minus rehab only; this calculator counts closing and holding too, because the refinance has to return those dollars as well. Type a price above the ceiling and watch the grade card and cash-left figure move first; they are the two places a failed 70% test shows up.

What decides whether your capital comes back

Three factors decide whether your capital comes back: ARV accuracy, refinance LTV, and rehab control. Miss the appraisal and the loan comes up short; pick a lower LTV and more cash stays in; let the rehab run over and the all-in cost eats the margin the refinance needed.

The appraisal is the bottleneck investors budget for least. The refinance is a percentage of appraised value, not of your cost sheet, so a $20,000 miss on ARV removes $14,000 of loan at 70% LTV before you touch anything else. Comp the ARV like a skeptic: sold comparables, same condition, same street quality, never the listing price of the house you hope yours becomes.

LTV is the dial you negotiate with the lender. Cash-out refinances on investment property commonly cap near 70 to 75% of appraised value: every extra point of LTV returns more of your cash at closing and raises the new payment by the same stroke, which tightens post-refi cash flow and DSCR together. Size the refinance before you buy, not after the rehab, because the loan you qualify for decides how much capital actually comes home.

Rehab control is the factor most in your hands and the one most budgets fudge. Every overrun dollar lands twice: once in the all-in cost pushing against the 70% ceiling, and again in the holding months that add interest and taxes while work drags. Ask active investors where BRRRRs die and the answer is consistent: not in the rehab, at the refinance, when a soft appraisal meets a blown budget and the capital that was supposed to recycle stays buried.

Infinite return, explained

Infinite return happens when refinance proceeds equal or exceed total cash invested, leaving zero or negative cash in the deal. Division by zero is undefined, so cash-on-cash has no finite answer: any post-refi cash flow on $0 left in reads as infinite.

The math is simple. Annual cash flow divided by cash left in deal is the return; cut the denominator to $7,700 and $5,916 a year prints 76.8%, cut it to $0 and the same $493 a month has nothing to divide by. Our default deal sits one step short of it: $94,100 back of $101,800 leaves $7,700 in, so the meter reads very high instead of infinite.

Here is what infinite return hides: the debt stays. The refinance loan still has to be paid every month, from rent, and a vacancy or a rent dip does not care that your basis is zero. Infinite describes recovered capital, not safety: no dollars stuck, full payment due. Underwrite the post-refi payment like the capital is still in, because the lender's claim on the property never left. A banner on this page appears only when the trigger holds; until then the CoC figure is the honest number.

The infinite return reality check

Most BRRRR deals do not reach infinite return, and that is not failure. The default deal on this page recovers $94,100 of $101,800 invested, a 92% capital recovery, and still leaves $7,700 working. That is a strong BRRRR by any realistic standard, and its return reads as a very high percentage rather than infinity.

Three numbers matter more than the infinity banner: the capital recovery rate, the post-refi cash flow, and the equity created. The default deal recovers 92% of capital, banks $493 a month, and creates $109,200 of equity, the gap between the $363,000 ARV and the $253,800 all-in. A deal that recovers 85% while cash flowing $400 a month is a successful BRRRR; the $15,000 left in is capital working, not capital lost.

Infinite return is the aspirational ceiling, not the pass or fail line. Chasing the last few percent of recovery usually means maximizing the refinance loan, which raises the payment, drops the cash flow, and thins the DSCR. The better target is the balance: recover most of the capital, keep the coverage above the lender's line, and let the equity build. Judge the deal on all three, and treat infinity as a bonus, not a grade.

BRRRR vs flipping vs buy-and-hold

BRRRR recycles capital through refinancing, flipping converts a rehab into a lump profit at sale, and buy-and-hold keeps the asset, the debt, and the cash flow for years. Same renovation skills, three different paydays: recovered capital, sale proceeds, or decades of rent.

Flipping wins when you want out: one taxed payday, no tenants, no second loan to service. Buy-and-hold wins when the property already cash flows at purchase and you value sleep over speed. BRRRR wins when the discount is deep enough to survive an appraisal and you would rather hold several rentals on recycled capital than one owned free and clear.

For the same rehab math with a sale exit instead of a refinance, runs the same rehab as a flip instead prices the deal in one pass.

The three strategies use the same rehab skills toward different ends: one returns your cash, one pays you once at closing, one pays you monthly for decades.

When BRRRR works and when it doesn't

BRRRR is conditional. The strategy works when a specific set of conditions holds at once, and it stalls when any one of them drops out. Listing the conditions honestly is faster than learning them one failed refinance at a time.

It works when the purchase lands at or under 70% of ARV all-in, because that is the only math a 70% refinance can fully recycle. It works when mortgage rates sit below or near the property's cap rate, so the leveraged return beats the unleveraged one. It works when rents are stable or rising, because the refinance underwrites rent, and when the rehab is controlled, because overruns press on the 70% ceiling from the cost side.

It fails from the other direction. High rates against flat rents squeeze the refinance DSCR until the loan shrinks or dies. Thin markets without sold comps make the appraisal a guess, and a soft appraisal shrinks the loan no matter what the rehab achieved. Rehab overruns eat the spread twice, once in all-in cost and again in the holding months. And a refinance DSCR that only works at today's rent leaves no room for a vacancy before closing.

The practical test: write down all four working conditions for your deal, with the number that proves each one. A missing number is a missing leg, and BRRRR stands on all of them or none.

Post-refi cash flow and the lender test

Post-refi cash flow is what's left after the refinance payment; the lender tests the same income against a 1.25× DSCR floor. Both numbers come from one division: post-refi NOI divided by post-refi annual debt is the coverage ratio, and the payment you subtract for cash flow is the same payment the lender annualizes for coverage.

Coverage above 1.25 means the property earns its new payment with a quarter to spare; between 1.0 and 1.25 it pays but leaves no cushion, and most lenders price that thinness into the rate or ask for reserves; below 1.0 the rent cannot carry the loan and the refinance as sized does not happen. Our default deal covers at 1.29 on $26,200 of NOI against a $20,287 annual payment, which is why the grade card stays green.

A larger refinance loan pulls more cash out and shrinks both cushions at once: the payment rises, so monthly cash flow falls and coverage falls with it. That tradeoff is the whole post-refi decision, and it is why lenders also impose seasoning, typically 6 to 12 months of ownership before they will base a loan on the new value. Test the payment first with the DSCR calculator: if coverage fails there, no appraisal can save the refinance.

Three mistakes that trap capital

Three mistakes trap BRRRR capital: an optimistic ARV, a rehab that runs over, and a deal underwritten to the purchase while nobody prices the refinance. Each one strands money in a different place; together they are the full catalog of stuck deals.

An optimistic ARV poisons everything downstream because every later number is a percentage of it. Comp against finished sales, not asking prices, and haircut the result for condition differences before it enters the sheet; a $20,000 fantasy at the top becomes $14,000 of missing loan at a 70% refinance, and no negotiation recovers money the appraisal never finds.

A rehab overrun charges double. The extra dollars join the all-in cost pressing on the 70% ceiling while the extra weeks add holding costs and interest-only payments that join it there too. Contingency is not pessimism: price a contingency buffer into the rehab line and the overrun spends the buffer instead of the refinance proceeds.

Underwriting the purchase while ignoring the refinance is the quietest killer. The buy price, the rehab bid, and the rent pro forma can all check out while the exit quietly fails on DSCR, seasoning, or a rate that moved since the plan was drawn. Model the refinance first: lock the payment, the coverage, and the seasoning clock, then see what purchase price those three allow.

The hard money balloon is the deadline behind all the others: short-term balances come due on the lender's calendar, not yours. On the default deal's $160,000 balance at 10% interest-only, every month past the term adds $1,333 of interest before any extension fee, which most hard money lenders price at a point or more of the balance. Two months of drift can add $5,000 or more to all-in cost while the 70% ceiling sits still, and a lender who will not extend forces a sale on a timeline nobody picked. The fix: date the refinance application from the purchase date, not the rehab finish, and start it with months to spare.

The seasoning clock mismatch is the quieter version of the same mistake. Lenders typically want 6 to 12 months of ownership before basing a loan on the new appraised value, and the clock starts at closing, not at lease signing. An investor who targets a 12-month seasoning lender but applies at month six spends the gap paying holding costs and interest while the finished unit sits approved and unrefinanced. The cost is the bleed rate: roughly $2,100 a month on the default deal's $800 holding and $1,333 interest. The fix: confirm the seasoning requirement before the purchase, pick the refinance lender then, and count backward from the balloon when scheduling the rehab.

How to use this calculator + Which calculator to use next

Work the form in money order: purchase and acquisition first, then rent, then the refinance, top to bottom. Every figure on the page recomputes as you type, with no submit step; save up to three deals to compare, and copy the link to keep or share the exact inputs.

Empty fields fall back to the example deal shown in gray, so the sheet is never blank and a placeholder is always the number being used. Reset clears every field at once; the holding-cost box under the purchase group narrates interest and carrying cost as you type.

The grade card at the bottom of the report scores the deal out of 100 across capital recovery, equity, cash flow, the 70% test, and coverage; expand its calculation to see the weights. The capital timeline above it plots all thirty years, so a refinance that looks thin in year one can still be judged on the full hold.

Three sibling sheets finish the job this one starts. Check the income against the cap rate calculator, stress the return on trapped cash with the cash-on-cash calculator, and clear the lender bar with the DSCR calculator.

Run them in that order and each answer sets up the next: income first, return on stuck cash second, lender coverage last. A deal that passes all three on conservative inputs is underwritten; anything else is a thesis waiting on an appraisal.

When the property stays a rental instead of being refinanced at the end, the rental cash flow calculator projects the cash flow and equity across the full hold, sale included.