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BRRRR Calculator

Enter your purchase, rehab, ARV and rent figures to run the BRRRR numbers.

How it is calculated

Three formulas, all in dollars. The refinance loan is refi = ARV × LTV ÷ 100, where ARV is the after-repair value and LTV is the lender's maximum loan-to-value in percent. Cash invested is purchase + rehab + closing, and cash left in deal = cash invested − refi. A negative figure means the refinance returned more than you put in. Annual cash flow is (monthly rent − monthly expenses) × 12, so both rent and expenses are monthly and the expenses must already include the new mortgage payment, taxes, insurance and upkeep, because the tool does not work out a payment itself. Refinance fees, holding costs during the rehab and vacancy are not modelled. Purchase, ARV and LTV must be above zero.

Worked example

Buy for 120,000, rehab 40,000, closing costs 6,000, so 166,000 is invested. After the work the property is valued at 210,000 and the lender allows 75% LTV: refi = 210,000 × 0.75 = $157,500.00. Cash left in deal: 166,000 − 157,500 = $8,500.00. Rent is 1,800 a month and all expenses including the mortgage are 1,350, so (1,800 − 1,350) × 12 = $5,400.00 per year. With only 8,500 still tied up, most of the capital is free for the next deal.

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Common mistakes

  • Leaving the new mortgage payment out of the expenses. The tool subtracts only what you enter, so cash flow is overstated if the loan payment is missing.
  • Entering annual rent or annual expenses. Both fields are monthly; the tool multiplies the difference by 12 itself.
  • Entering the LTV as 0.75. The field is a percentage, so 75 means 75% and 0.75 gives a refinance of well under 1% of the value.
  • Using an optimistic ARV. The refinance is only as large as the appraisal, and an ARV that is 10% too high leaves much less money pulled out than planned.
  • Forgetting refinance fees and the cost of carrying the property during the rehab, which are not in the cash-left figure.

Sources

About this calculator

BRRRR — Buy, Rehab, Rent, Refinance, Repeat — is a real estate investing strategy built around recycling the same capital into multiple properties: an investor buys a distressed property below market value, renovates it to raise its after-repair value (ARV), rents it out, then refinances based on the new, higher ARV to pull cash back out and repeat the process on the next deal.

The key number is how much cash is left tied up in the deal after the refinance: Cash left in deal = (Purchase price + Rehab cost + Closing costs) − Refinance loan amount, where the refinance loan is the ARV multiplied by the lender’s maximum loan-to-value percentage; a well-executed BRRRR deal aims to pull out most or all of the original capital, alongside positive cash flow from the rent minus expenses. This calculator runs those numbers from your purchase, rehab, closing cost, ARV, loan-to-value and rent figures to show the cash left in the deal, the refinance loan amount and the annual cash flow, which is (monthly rent − monthly expenses) × 12. The new mortgage payment is not calculated separately, so include it in your monthly expenses if you want it reflected in the cash flow.

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Comments (1)

  • Editorial team

    Annual cash flow here is rent minus expenses times twelve, with no loan payment taken out. Rent and expenses are monthly figures, so put the new refinance payment into the expenses field or the cash flow will look better than it is. A negative cash left means the refinance returned more than you put in. What loan-to-value does your lender allow?

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