BRRRR Method Calculator
Analyze your Buy, Rehab, Rent, Refinance, and Repeat real estate deals.
Analyze Your BRRRR Deal
The total cost to acquire the property.
The total budget for all repairs and improvements.
The estimated market value of the property after renovations are complete.
The total rent collected from tenants each month.
Includes taxes, insurance, maintenance, property management, etc.
Refinance Terms
The percentage of the ARV the bank will lend you. Typically 70-75%.
The annual interest rate for the new cash-out refinance loan.
The length of the refinance mortgage.
Total Cash Pulled Out (Refinance)
Total Cash Invested
New Loan Amount
Monthly Cash Flow
Cash-on-Cash Return
Equity Left in Deal
New Monthly P&I
Investment vs. Value
Deal Summary
| Metric | Value |
|---|---|
| Purchase Price | $150,000.00 |
| Rehab Costs | $40,000.00 |
| Total Cash Invested | $190,000.00 |
| After Repair Value (ARV) | $250,000.00 |
| Refinance Loan Amount | $187,500.00 |
| Total Cash Pulled Out | -$2,500.00 |
| Money Left in Deal | $2,500.00 |
| Monthly Gross Rent | $2,200.00 |
| Monthly Operating Expenses | $700.00 |
| New Monthly Mortgage (P&I) | $1,185.10 |
| Monthly Net Cash Flow | $314.90 |
| Annual Cash Flow | $3,778.80 |
| Cash on Cash Return | 151.15% |
| Equity Remaining in Property | $62,500.00 |
What is a BRRRR Calculator?
A brrrr calculator is a specialized financial tool designed for real estate investors who use the “Buy, Rehab, Rent, Refinance, Repeat” (BRRRR) strategy. This method involves purchasing a distressed property, renovating it to increase its value, renting it out to tenants, and then performing a cash-out refinance to pull out the initial capital invested. The goal is to repeat the process with a new property, thereby scaling a rental portfolio with minimal capital left in each deal. This calculator helps you analyze the financial viability of a potential BRRRR project by projecting key metrics like cash flow, return on investment, and the amount of cash you can expect to pull out upon refinancing. For more advanced deal analysis, you may want to check out a comprehensive Rental Property Calculator.
The BRRRR Calculator Formula and Explanation
The magic of the BRRRR method lies in the numbers. Our brrrr calculator automates these calculations, but understanding the formulas is crucial for any serious investor.
- Total Cash Invested = Purchase Price + Rehabilitation Costs
This is the total amount of capital you need to acquire and fix up the property. - New Loan Amount = After Repair Value (ARV) x Refinance LTV (%)
This determines how much the bank will lend you based on the property’s new, higher value. - Total Cash Pulled Out = New Loan Amount – Total Cash Invested
This is the key metric. A positive number means you’ve pulled out all of your initial capital plus a profit. A negative number indicates how much cash you’ll have to leave in the deal. - Monthly Cash Flow = Gross Monthly Rent – Monthly Operating Expenses – New Monthly Mortgage Payment
This tells you if the property will be profitable on a month-to-month basis after refinancing. - Cash-on-Cash Return (COC) = (Annual Cash Flow / Money Left in Deal) x 100
This measures the annual return on the capital you have remaining in the property. If you pull all your cash out, this return is theoretically infinite.
Variables Table
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| Purchase Price | Cost to buy the property | Currency ($) | Varies by market |
| Rehab Costs | Cost to renovate the property | Currency ($) | 10-40% of Purchase Price |
| After Repair Value (ARV) | Value of property after renovation | Currency ($) | 125-150% of Total Investment |
| Refinance LTV | Loan-to-Value for the refinance loan | Percentage (%) | 70-80% |
| Gross Monthly Rent | Income from tenants | Currency ($) | 0.8-1.2% of ARV |
Practical Examples
Example 1: The “Perfect” BRRRR Deal
An investor finds a property and runs the numbers through the brrrr calculator:
- Inputs:
- Purchase Price: $100,000
- Rehab Costs: $30,000
- After Repair Value (ARV): $200,000
- Refinance LTV: 75%
- Calculation:
- Total Investment: $130,000
- New Loan Amount: $200,000 * 0.75 = $150,000
- Result: Total Cash Pulled Out: $150,000 – $130,000 = $20,000.
- Outcome: The investor gets their entire $130,000 back, plus an extra $20,000, while retaining ownership of a cash-flowing rental property. This is the ideal BRRRR scenario.
Example 2: Leaving Money in the Deal
Sometimes, you have to leave some cash in the deal, which can still be a great investment.
- Inputs:
- Purchase Price: $220,000
- Rehab Costs: $50,000
- After Repair Value (ARV): $320,000
- Refinance LTV: 75%
- Calculation:
- Total Investment: $270,000
- New Loan Amount: $320,000 * 0.75 = $240,000
- Result: Total Cash Pulled Out: $240,000 – $270,000 = -$30,000.
- Outcome: The investor must leave $30,000 of their own capital in the property. However, they now own a property with $80,000 in equity ($320k ARV – $240k Loan) for only $30,000 out of pocket. Understanding the ARV Calculator is crucial for this step.
How to Use This BRRRR Calculator
- Enter Property Costs: Input the Purchase Price and your estimated Rehabilitation Costs.
- Determine Value and Rent: Provide the After Repair Value (ARV) and the Gross Monthly Rent you expect to collect. Accurate ARV is key, so research comparable properties.
- Input Operating Expenses: Enter your total estimated Monthly Operating Expenses, including taxes, insurance, property management, vacancy, and repairs.
- Set Refinance Terms: Fill in the Loan-to-Value (LTV), Interest Rate, and Loan Term for your expected cash-out refinance loan.
- Analyze the Results: The calculator instantly shows your Total Cash Pulled Out, Monthly Cash Flow, and Cash-on-Cash Return. Use these numbers to decide if the deal meets your investment criteria.
Key Factors That Affect BRRRR Deals
- Accurate ARV: Overestimating the After Repair Value is the most common mistake. Be conservative and base your ARV on solid, recent comparable sales.
- Rehab Budget Creep: Renovations almost always have surprises. Include a contingency fund (10-20% of your budget) to cover unexpected costs.
- Financing Terms: The LTV and interest rate on your refinance loan directly impact how much cash you can pull out and what your final cash flow will be. Shop around for the best terms. Consider a Fix and Flip Calculator for analyzing short-term financing.
- Market Rents: Be realistic about how much rent the property can command. Overestimating rent will lead to disappointing cash flow.
- Holding Costs: Don’t forget to account for costs incurred during the rehab and rental phase, such as loan payments, taxes, and insurance, before you have a tenant.
- The “Seasoning” Period: Most lenders require a “seasoning” period (typically 6-12 months) before they will do a cash-out refinance based on the new appraised value.
Frequently Asked Questions (FAQ)
What is the “70% Rule” in BRRRR?
The 70% Rule is a guideline that says you should pay no more than 70% of the ARV of a property, minus the cost of repairs. For example, if a property’s ARV is $200,000 and it needs $30,000 in repairs, the rule suggests your maximum offer should be ($200,000 * 0.70) – $30,000 = $110,000. Our brrrr calculator helps you test this rule against your specific deal.
How much cash do I need to start the BRRRR method?
You need enough cash to cover the down payment for the initial purchase (or buy in all cash), plus the entire rehab budget and holding costs until the property is refinanced.
Is the BRRRR method risky?
Yes, it involves significant risk. Risks include underestimating rehab costs, overestimating the ARV, long vacancies, and changes in the lending environment. A thorough analysis with a brrrr calculator is essential to mitigate these risks.
Can I do a 100% cash-out refinance?
It’s rare but possible. To pull out 100% (or more) of your invested capital, your total investment (purchase + rehab) must be less than or equal to the lender’s LTV percentage of the ARV. For instance, if your total investment is $140,000 and the lender offers 75% LTV, your ARV must be at least $186,667 ($140,000 / 0.75).
What is a good cash-on-cash return for a BRRRR?
If you have money left in the deal, a COC return of 8-12% is often considered good, but this varies by market and investor goals. The ultimate goal for many is an “infinite” return, achieved by pulling out all of their initial capital.
How long does the BRRRR process take?
Typically, a full cycle takes 6 to 12 months, depending on the speed of renovation, finding a tenant, and the lender’s seasoning requirements for the refinance.
What’s the difference between a flip and a BRRRR?
In a flip, you sell the property after the rehab for a one-time profit. With BRRRR, you keep the property as a long-term rental asset, generating cash flow and appreciation over time. Analyzing this can be done with a Real Estate Investment Calculator.
Does this calculator work for all currencies?
The calculator uses the ‘$’ symbol, but the formulas are unitless. You can use it for any currency (Euros, Pounds, etc.) as long as you use the same currency for all inputs.
Related Tools and Internal Resources
Expand your real estate analysis toolkit with these other powerful calculators:
- ARV Calculator: A tool focused specifically on calculating the After Repair Value of a property.
- Rental Property Calculator: For in-depth analysis of long-term buy-and-hold rental properties.
- Fix and Flip Calculator: Perfect for investors who plan to sell the property after renovation instead of renting it out.