BRRRR Method Calculator
Calculate returns for the BRRRR strategy — Buy, Rehab, Rent, Refinance, Repeat. See how much cash you recover and your true return.
Results
Visualization
How It Works
The BRRRR method lets you recycle capital by buying undervalued properties, rehabbing to increase value, renting for income, then refinancing to pull your cash back out and repeat. Done well, you can build a rental portfolio with limited capital by forcing equity through renovations.
The Formula
Variables
- Purchase Price — Amount paid for the distressed property (should be well below ARV)
- Rehab Cost — Total renovation and repair costs to bring property to market condition
- ARV — After repair value — the appraised market value once renovations are complete
- LTV — Loan-to-value ratio for the refinance — typically 70-80% for investment properties
- Cash Left in Deal — Your money still tied up after refinancing — ideally zero or negative
- Annual Cash Flow — Monthly rent minus all expenses (including new mortgage) times 12
Worked Example
You buy a distressed property for $180,000 and spend $45,000 on rehab (total: $225,000). The ARV appraises at $300,000. You refinance at 75% LTV, getting a $225,000 loan. Cash left in deal = $225,000 - $225,000 = $0. You got all your money back! With $2,200 rent and $1,600 expenses (including the new mortgage), annual cash flow is $7,200 — an infinite cash-on-cash return since you have $0 invested.
Practical Tips
- The key to BRRRR is buying at a deep enough discount that the refi covers your entire investment.
- Get a reliable ARV estimate BEFORE buying — overestimating ARV is the #1 BRRRR mistake.
- Budget 10-20% over your rehab estimate for surprises — they always happen with renovations.
- Build a relationship with a local lender who does delayed financing or cash-out refinances for investors.
- The property must appraise at your target ARV — if it doesn't, you'll leave more cash in the deal than planned.
Frequently Asked Questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. It's a strategy for recycling investment capital across multiple rental properties by forcing equity through renovations and pulling cash out via refinancing.
How much below ARV should I buy?
Most BRRRR investors follow the 70% rule: Purchase price + rehab cost should be no more than 70% of ARV. This leaves room for the refinance to cover your full investment and closing costs.
What LTV can I get on a refinance?
Most lenders offer 70-80% LTV on investment property cash-out refinances. Some portfolio lenders go to 80%, while conventional loans typically cap at 75% for investment properties.
How long do I have to wait to refinance?
Most lenders require a 6-month seasoning period before a cash-out refinance. Some portfolio lenders and DSCR lenders allow delayed financing with no seasoning if you purchased with cash.
What are the risks of the BRRRR strategy?
Main risks: rehab cost overruns, ARV coming in lower than expected, rent not covering the new mortgage payment, and interest rate changes between purchase and refinance. Have reserves to cover worst-case scenarios.