BRRRR Calculator

Is this BRRRR deal worth pursuing?

Model every step: buy, rehab, rent, refinance, and the 70% rule in one place.

Buy + Rehab Costs

Purchase Price

Contract price for the property.

Rehab Budget

Renovation and repair costs.

Purchase Closing Costs

Title, escrow, lender fees, inspections.

Holding Costs

Utilities, interest, taxes during rehab.

After Repair Value + Refinance

After Repair Value (ARV)

Expected appraisal after rehab.

Refinance LTV

Typical DSCR or conventional refi: 70-80%.

Refi Closing Costs

Paid from loan proceeds or cash.

Interest Rate

Fixed rate on the new loan.

Loan Term

yrs

Common terms: 30 or 25 years.

Rent + Operating Assumptions

Monthly Rent

Gross scheduled rent.

Annual Property Tax

Yearly real estate taxes.

Annual Insurance

Landlord insurance premium.

Vacancy Reserve

Typical: 5% to 8%.

Maintenance Reserve

Repairs, capex, turnover.

Management Fee

Enter 0 if self-managing.

Deal Snapshot

Caution

$189.89

Monthly cash flow after refi

Total Project Cost

$196,000.00

Cash-on-Cash

18.23%

Cash Left In

$12,500.00

Equity After Refi

$62,500.00

70% Rule Check

Over 70%

Max Offer (0.70 × ARV − Rehab)

$135,000.00

Buffer vs Purchase Price

-$15,000.00

70% rule uses ARV and rehab only. Closing and holding costs should fit in your contingency.

Refi + Cash Position

New Loan Amount

$187,500.00

Net Refi Proceeds

$183,500.00

Monthly P&I

$1,247.44

Breakeven Rent

$2,010.11

Performance Metrics

DSCR

1.15x

Cap Rate

6.90%

Annual Cash Flow

$2,278.69

Operating Costs (Monthly)

$762.67

This tool is for illustrative purposes only and does not constitute professional financial, tax, or legal advice. Calculations are estimates and may not reflect real-world variables or local regulations. Always consult with a qualified professional before making financial decisions.

Recommended Next Steps

Continue your journey with these related tools

Mortgage Calculator

Plan your home purchase with detailed breakdowns.

Rent Increase

Project how rent compounds over time.

Investment Property ROI

Rental returns

The BRRRR Method Masterclass: Scaling Your Portfolio

Key Insights & Concepts

The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy is a powerful method of real estate investing. Unlike traditional investing where you save up 20% for each down payment, BRRRR allows you to recycle the same capital over and over again to acquire a portfolio of properties.

The Formula: How It Works

Buy (The Most Critical Step)

You cannot BRRRR a retail-priced home. The strategy relies on buying distressed properties at a steep discount. A common guideline is the 70% Rule: Don't pay more than 70% of the After Repair Value (ARV) minus repairs.
Formula: (ARV × 0.70) - Repairs = Max Offer Price.

Rehab (Force Appreciation)

This isn't HGTV. Focus on "Tenant-Proof" finishes that add value without breaking the bank.
Key Repairs: Paint, flooring (LVP), kitchens, and bathrooms. Avoid structural changes unless the ROI is massive.

Rent (Stabilization)

Banks generally won't refinance an empty house. You need a signed lease and often 1-2 months of rent collected to prove "stabilization." Good screening here prevents headaches later.

Refinance (The Cash Out)

This is the magic moment. You take out a new long-term mortgage based on the new appraised value (ARV), not what you paid. If you owe $150k but it appraisess for $250k, the bank might lend you $187.5k (75% LTV). You pay off the original $150k and keep the rest.

Financing the Deal: Hard Money vs. Private Money

Since standard banks won't lend on "fixer-uppers" with peeling paint or missing kitchens, you need short-term bridge debt for the "Buy" phase:

Hard Money Lenders

Professional companies that lend on the asset, not just your credit.
Pros: Fast closing (7-10 days), reliable.
Cons: Expensive (10-12% interest + 2-3 points).

Private Money

Individuals (dentists, lawyers, family) looking for better returns than a savings account.
Pros: Flexible terms, often cheaper.
Cons: Harder to find, relational risk.

The "Seasoning" Trap

Warning: Most big banks require you to own the property for 6 to 12 months ("seasoning") before they will use the new appraised value for a refinance. If you need the cash sooner, look for small local banks or credit unions, as they often have no seasoning requirements (also called "Delayed Financing").

Why BRRRR Fails (And How to Prevent It)

The Appraisal Gap: You spent $200k, but the appraiser says it's only worth $220k, not the $280k you expected. Now your money is "stuck" in the deal. Fix: rigorous comp analysis before buying.
Rehab Overruns: Contractors find black mold or termites. The $30k budget becomes $50k. Fix: Maintaining a 15-20% contingency fund is strongly recommended.
Over-Leverage: You pull out so much cash that the mortgage payment is higher than the rent. Fix: Prioritizing cash flow over maximum cash-out is a common tenet. Leaving $5k in the deal for a cash-flowing asset is better than $0 left in a liability.

Frequently Asked Questions

The time (usually 6-12 months) you must own a property before a bank will refinance it based on its new appraised value rather than your purchase price.

Yes, but it's harder. Most conventional lenders won't fund a distress purchase (e.g., no kitchen). You typically buy with cash or hard money, then refinance into a conventional loan.

This is the biggest risk. If the ARV is lower than expected, you may not be able to pull all your cash out, leaving money stuck in the deal (leaving equity).

A rule of thumb: Don't pay more than 70% of the After Repair Value minus repair costs. This leaves a 30% buffer for profit and lenders who only lend up to 70-75% LTV.

Hard money comes from institutional lenders with higher fees/rates but reliability. Private money comes from individuals (friends, family) with flexible terms.

Not necessarily, but many investors use one for liability protection. Note that financing a property in an LLC often requires a 'DSCR Loan' (Debt Service Coverage Ratio) which may have slightly higher interest rates than a personal conventional mortgage.

A cash-out refinance replaces your existing mortgage (or cash position) with a new, larger mortgage. The difference between the two is paid to you in cash. In BRRRR, this cash is used to pay back the original hard money loan and down payment.

Yes, it is one of the most scalable real estate strategies because you are recycling capital. Once you refinance and get your cash back, you can use that same money to buy the next property, effectively acquiring multiple assets with one initial investment.

Look for 'Comps' (Comparable Sales)—properties similar to yours in size, location, and condition that have sold in the last 3-6 months. Don't guess. If you overestimate ARV, the entire BRRRR math fails.

Yes, but it requires a very strong 'Core Four' team on the ground: A Deal Finder (Agent/Wholesaler), A Contractor, A Property Manager, and a Lender. Without a trusted team, managing a major rehab from afar is extremely risky.