BRRRR calculator
Buy, rehab, rent, refinance, repeat — the whole strategy turns on one number, which is how much of your cash you get back out.
The only number that matters
BRRRR works by recycling the same deposit into deal after deal. Whether it works at all comes down to how much of your money you get back at refinance. If you pull all of it out, you can go again immediately. If a third stays trapped, your next deal is a third harder.
purchase price -185000 | − | 185,000 |
rehab -42000 | − | 42,000 |
closing costs -6200 | − | 6,200 |
holding costs -3500 | − | 3,500 |
total invested: purchase price + rehab + closing costs + holding costs | = | -236,700 |
after repair value: 310000 | = | 310,000 |
cash out refinance: after repair value * 0.75 | = | 232,500 |
cash left in deal: total invested + cash out refinance | = | -4,200 |
| Total | -236,700 |
A total of 236,700 went in and the refinance returns 232,500, leaving 4,200 trapped. That is close to a full recycle and would count as a good deal.
Where deals go wrong
The after-repair value is optimistic. This is the single biggest failure. ARV comes from comparable finished sales in the same area, not from adding your costs to the purchase price. If the ARV here were 285,000 rather than 310,000, the refinance would release 213,750 and leave 22,950 stuck — more than five times as much, from one wrong assumption.
The rehab overruns. Ten to twenty per cent over budget is normal rather than exceptional. Model the overrun before you commit, not after.
Holding costs are forgotten. Mortgage or bridging interest, utilities, insurance and taxes run for every month the property is empty. A rehab that slips from three months to six delays the refinance and keeps costing you the whole time it is late.
The seasoning period
Most lenders will not refinance against the new value immediately. A seasoning period of six to twelve months is common, and until it passes the refinance is based on what you paid rather than what it is now worth — which defeats the entire strategy.
Ask about seasoning before you buy, not after the rehab. It is the detail that most often turns a deal that worked on paper into money tied up for a year.
Testing it before you commit
Because the ARV is the assumption everything depends on, it is worth writing the pessimistic version as its own line rather than trusting one figure:
conservative refinance: 285000 * 0.75
Put it directly under the optimistic one and you can see both outcomes at once. If the deal only works at the top of your ARV range, it is not a deal — it is a bet on the range.
And a refinanced property still has to pay for itself afterwards. Run the finished numbers through monthly cash flow and DSCR before committing: a perfect capital recycle that produces negative monthly cash flow has simply moved the problem.
Model your own deal →Questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. The strategy recycles the same deposit into successive deals by pulling the original cash back out through a refinance once the property has been improved and let.
How much cash should be left in a BRRRR deal?
As little as possible, since trapped cash is what stops you doing the next deal. Recovering all of it is the ideal; a few thousand left in is normal and still counts as a good outcome.
What loan-to-value do refinance lenders use?
Seventy-five per cent of the after-repair value is the common figure for an investment property, though it varies by lender and market. That is what determines how much the refinance releases.
What is a seasoning period?
The time a lender requires you to have owned the property before they will refinance against its new value rather than your purchase price. Six to twelve months is common, and it is worth confirming before you buy rather than after the rehab.
What most often goes wrong with a BRRRR deal?
An optimistic after-repair value. It should come from comparable finished sales nearby, not from adding your costs to the purchase price. A 25,000 error in ARV can multiply the cash left trapped several times over.