Transparent method
The formula
Worked example
Example inputs
How to interpret the result
The BRRRR strategy's success hinges on the after-repair value coming in at or above what was assumed going in, because the refinance step that pulls cash back out of the deal is sized against that appraised value. An after-repair value that comes in lower than projected leaves more cash trapped in the deal than the strategy was originally built to achieve.
Before you rely on it
What to check
Verify the after-repair value assumption against genuinely comparable recent sales, and confirm the lender's seasoning requirement before counting on a specific refinance timeline.
The common error
Where people go wrong with BRRRR calculator
Assuming the projected after-repair value will be confirmed exactly by the eventual appraisal. A lower appraised value than projected leaves more cash trapped in the deal than the strategy was meant to require, changing the real return.
Sensitivity evidence
How purchase price changes the cash left in deal
| Purchase price | Cash left in deal | Cash-on-cash return after refinance | Estimated refinance proceeds |
|---|---|---|---|
| $160,000 | $0.00 | : | $262,500 |
| $180,000 | $0.00 | : | $262,500 |
| $200,000worked example | $0.00 | : | $262,500 |
| $220,000 | $17,500 | 68.6% | $262,500 |
| $240,000 | $37,500 | 32.0% | $262,500 |
Every input, tested
Which input moves the cash left in deal most
| Input | Tested from | To | Cash left in deal at each end | Swing |
|---|---|---|---|---|
| Purchase price | $180,000 | $220,000 | $0.00 to $17,500 | $17,500 |
| Rehab and closing cash | $54,000 | $66,000 | $0.00 to $3,500 | $3,500 |
| After-repair value | $315,000 | $385,000 | $23,750 to $0.00 | $23,750 |
| Refinance LTV | 73.0% | 77.0% | $4,500 to $0.00 | $4,500 |
| Stabilized annual cash flow | $10,800 | $13,200 | $0.00 to $0.00 | none |
Two variables at once
Cash left in deal by purchase price and rehab and closing cash
| Purchase price \ Rehab and closing cash | $48,000 | $60,000 | $72,000 |
|---|---|---|---|
| $160,000 | $0.00 | $0.00 | $0.00 |
| $180,000 | $0.00 | $0.00 | $0.00 |
| $200,000 | $0.00 | $0.00 | $9,500 |
| $220,000 | $5,500 | $17,500 | $29,500 |
| $240,000 | $25,500 | $37,500 | $49,500 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Purchase price | $200,000 |
| Rehab and closing cash | $60,000 |
| After-repair value | $350,000 |
| Refinance LTV | 75.0% |
| Stabilized annual cash flow | $12,000 |
| Cash left in deal | $0.00 |
| Cash-on-cash return after refinance | : |
| Estimated refinance proceeds | $262,500 |
Where the inputs come from
BRRRR means buy, rehab, rent, refinance, repeat. Purchase price is what you pay, rehab and closing cash is the money spent to acquire and renovate, after-repair value is what the property is worth once finished and rented, and the refinance loan-to-value is the share of that value a lender will lend, often 70% to 75% for investment properties. Stabilized annual cash flow is what the property earns after the refinance. Use an appraisal-based value.
Using the cash left in deal in a real decision
If the appraisal comes in low, cash stays trapped, so test a lower value. Check that the new mortgage payment still leaves positive cash flow.
When the result stops applying
It depends on the appraisal, which can come in below your estimate, and on refinance rules such as seasoning periods that require you to own the property for months before refinancing. Refinance rates are higher for investors and can eat the cash flow. Rehab overruns and delays raise the cash needed. It works best when you buy far below the after-repair value.
What to compare it with
Compare with a flip on the house flip calculator, and check the rental numbers on the cash flow and DSCR pages. The cash-out refinance and mortgage refinance calculators show the loan side, and the rental property depreciation page covers the tax deduction. Confirm lender seasoning rules before you start.
People also ask
Frequently asked questions
What is the BRRRR method?
Buy a distressed property, rehab it, rent it, refinance to pull out your cash based on the higher value, and repeat with the proceeds.
What if the appraisal is lower than expected?
You leave more cash in the deal and the refinance may not return your investment, so use conservative values and plan for the shortfall.
What is a seasoning period?
The time a lender requires you to own a property before it will refinance based on the new value, often six to twelve months, though some lenders allow less.