BRRRR Calculator

About BRRRR Calculator

Analyze Buy-Rehab-Rent-Refinance-Repeat deals. This calculator provides instant results with step-by-step explanations to help you understand the calculation process.

How to use this calculator

1. Enter your purchase, rehab, refinance, rent, and expense numbers.
2. Choose or enter the lender loan-to-value used in the refinance step.
3. Review the calculator output for cash invested, refinance proceeds, equity left, and rental returns.
4. Use the results to judge whether the deal recovers most of your cash and still produces positive rental income.

The formula explained

• \(\text{cash invested}\) = total money put into the deal before refinance
• \(\text{down payment}\) = cash paid when buying the property
• \(\text{closing costs}\) = purchase and loan closing expenses
• \(\text{rehab costs}\) = repair and renovation expenses
• \(\text{carrying costs}\) = holding costs such as interest, taxes, insurance, utilities, and vacancy during rehab
• \(\text{other costs}\) = any extra deal costs included in the analysis
• \(\text{ARV}\) = after-repair value, the estimated value after renovations
• \(\text{LTV}\) = loan-to-value ratio used by the lender for the refinance
• \(\text{maximum refinance loan}\) = the largest loan amount based on ARV and lender LTV
• \(\text{existing mortgage balance}\) = remaining balance to be paid off at refinance
• \(\text{refinance cash out}\) = cash returned to you from the refinance after paying off the old loan
• \(\text{equity left in deal}\) = value remaining in the property after the refinance loan
• \(\text{annual cash flow}\) = net income from the rental over a year after expenses
• \(cash-on-cash return\) = annual return on the cash you have invested

Step by step method

1. Start with the acquisition side of the deal by entering the purchase price, down payment, and closing costs.
2. Add all rehab and holding costs so the tool can estimate total cash tied into the project.
3. Enter the expected after-repair value and refinance terms so the calculator can estimate the new loan amount and cash returned.
4. Enter the rent and operating expenses to estimate cash flow and return after the property is stabilized.

Worked example

Here is a realistic BRRRR example for a single-family rental that is renovated, refinanced, and then rented out.

1. You buy a property for \$150,000 with a 20 percent down payment, so the down payment is \$30,000. Add \$5,000 in closing costs and \$25,000 in rehab costs, for a total of \$60,000 cash invested before holding costs.
2. After renovations, the property is worth \$225,000. If the refinance lender allows 75 percent loan-to-value, the maximum refinance loan is \(225,000 \times 0.75 = 168,750\).
3. If the old mortgage balance is \$120,000, the refinance cash out is \$168,750 - \$120,000 = \$48,750\).
4. If the home rents for \$1,800 per month and expenses total \$1,200 per month, annual cash flow is \((1,800 - 1,200) \times 12 = \$7,200\).

Tips and common mistakes

• Use realistic ARV and rent numbers, not best-case guesses.
• Include holding costs and rehab overruns so you do not overstate profit.
• Check lender LTV carefully because a small change can materially affect refinance cash out.
• Do not confuse cash returned at refinance with total profit, because the rental income still matters.

Frequently asked questions