The BRRRR strategy—Buy, Rehab, Rent, Refinance, Repeat—is a popular method for real-estate investors to recycle capital and grow a rental portfolio. This calculator helps you estimate two key metrics: cash left in the deal after the refinance and cash-on-cash return based on the rental income. It is designed for beginners and small investors who want to run the numbers before making an offer.
What This Calculator Does
This tool estimates the capital you can recover from a single BRRRR transaction and the return on that recovered capital. It does not predict actual profit, guarantee refinancing terms, or replace professional underwriting. Use it to compare scenarios, understand how changes to rehab costs or refinance terms affect your capital, and prepare questions for lenders.
Inputs
| Input | What It Represents | Typical Range / Notes |
|---|---|---|
| Purchase Price | The amount you pay for the property. | Enter the negotiated or listed price. |
| Rehab Budget | Estimated cost of repairs and improvements. | Get multiple contractor quotes. Include a 10–20% contingency for unknowns. |
| Refinance LTV | Loan-to-value ratio based on the After-Repair Value (ARV). | Provided by your lender. Typical BRRRR refinance LTVs range from 70% to 80%. |
| Monthly Rent | Gross monthly rental income the property will generate. | Do not deduct vacancies, management, or repairs here; those are handled separately in cash-flow analysis. |
How to Read the Results
The calculator returns two figures:
1. Cash Left in the Deal – The amount of your original capital that is returned to you via the refinance loan. This is the equity you can use for your next property.
2. Cash-on-Cash Return – The annual pre-tax cash flow (rent minus estimated expenses) divided by the cash you still have at risk. This shows the return on the capital you did not recover.
A higher cash-left number means more capital recycling. A higher cash-on-cash return means better relative income on the remaining investment. Remember: these are estimates based on the numbers you input. Actual lender appraisals, final rehab costs, and tenant placement will affect real-world results.
Worked Example
Consider a hypothetical property:
| Input | Value |
|---|---|
| Purchase Price | $100,000 |
| Rehab Budget | $25,000 |
| Refinance LTV | 75% |
| Monthly Rent | $1,200 |
Step 1 – Determine the ARV.
For this example, assume the After-Repair Value is $180,000. (In practice, you would obtain a professional appraisal or use comparable sales.)
Step 2 – Calculate the refinance amount.
Refinance loan = ARV × LTV = $180,000 × 0.75 = $135,000.
Step 3 – Calculate total cash invested.
Total invested = Purchase Price + Rehab Budget = $100,000 + $25,000 = $125,000.
Step 4 – Calculate cash left in the deal.
Cash left = Refinance loan – Rehab Budget = $135,000 – $25,000 = $110,000.
(Note: This assumes the refinance covers the rehab costs and pays off any existing loan. If you paid cash, the full refinance amount is returned capital.)
Step 5 – Estimate annual cash flow.
Gross annual rent = $1,200 × 12 = $14,400.
Estimate expenses (taxes, insurance, maintenance, vacancy) at roughly 40–50% of rent for a preliminary look. Using 45%: Annual expenses ≈ $14,400 × 0.45 = $6,480.
Pre-tax annual cash flow = $14,400 – $6,480 = $7,920.
Step 6 – Calculate cash-on-cash return.
Cash-on-cash = Annual cash flow / Cash left in deal = $7,920 / $110,000 ≈ 7.2%.
Remember: This example uses hypothetical numbers. Your actual results will depend on the specific property, market, and loan terms.
Common Mistakes
- Underestimating rehab costs. Always get written estimates from contractors and add a contingency. Unexpected issues (mold, outdated wiring, permit delays) are common.
- Using an optimistic ARV. ARV is based on what similar, fully repaired homes have sold for in the area recently. Overestimating ARV can lead to a refinance that is too large or a loan that cannot be secured.
- Ignoring holding costs. This calculator focuses on capital recovery and cash-on-cash. It does not include mortgage payments, utilities, or property management fees during the rehab period.
- Forgetting closing costs. Refinances typically involve origination fees, appraisal fees, and title insurance. These reduce the net cash returned.
- Mixing pre-tax and post-tax figures. The cash-on-cash calculation here is pre-tax. Tax benefits (depreciation, deductions) are separate and vary by investor situation.
When to Talk to a Lender
Use this calculator as a starting point, not a final approval tool. Contact a lender when:
- You have a specific property under contract or a signed repair estimate.
- You want to confirm the maximum LTV your lender will allow for a BRRRF (BRRRR refinance) loan.
- You need current interest rates and loan terms to refine the cash-on-cash calculation.
- You want to understand how your credit profile, debt-to-income ratio, and the property type affect borrowing power.
Lenders will also review the rental income, your experience, and the property’s condition. Getting pre-qualified early can prevent you from overpaying or underestimating the capital you can recover.
FAQ
What does BRRRR stand for?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It is a strategy where an investor purchases a distressed property, repairs it, rents it out, refinances based on the increased value, and uses the returned capital to buy the next property.
What is cash left in the deal?
Cash left in the deal is the portion of your initial investment that is returned to you through the refinance loan. It represents the capital you can recycle into your next investment.
Do I need comps for a BRRRR calculation?
Yes. After-Repair Value (ARV) is a critical input. You will need recent sales data for similar, fully renovated homes in the same area to estimate ARV accurately. A local real-estate agent or appraiser can provide this.
What loan is used for the refinance phase?
BRRRR investors typically use a conventional cash-out refinance, a DSCR (Debt Service Coverage Ratio) loan, or a private/hard money loan that converts to a conventional loan after rehab. The specific product depends on your lender, credit profile, and the property type.
How long do I need to wait before doing the refinance?
There is no universal waiting period, but many lenders prefer that the property has been owned for at least a few months and that repairs are complete before refinancing. Some lenders have seasoning requirements (e.g., the property must have been off the title for 6–12 months). Check with your specific lender for their guidelines.
What are typical holding and closing costs to factor in?
Holding costs include mortgage payments, property taxes, insurance, utilities, and property management fees while you own the property. Closing costs on a refinance may include loan origination fees, appraisal fees, title insurance, and recording fees. These vary by location and lender and should be confirmed with your closing team.
Is this financial, legal, or tax advice?
No. This calculator and the accompanying explanations are for informational and educational purposes only. They do not constitute financial, legal, or tax advice. Consult a qualified professional before making any investment decisions.
---
Ready to run your own numbers? Use our free [BRRRR Calculator](/tools/brrrr-calculator) to input your purchase price, rehab budget, refinance terms, and estimated rent. See how much capital you could recover and what your return might look like.