Analyze a BRRRR real estate deal: total cash invested, cash-out refinance proceeds, cash invested after refinance, monthly cash flow, and cash-on-cash return.
| Step | Metric | Value | How It's Calculated |
|---|---|---|---|
| 1 | Original loan amount | $0.00 | Purchase price × (1 − down payment %) |
| 2 | Total cash invested | $0.00 | Down payment + purchase closing + rehab + holding |
| 3 | New loan (refinance) | $0.00 | ARV × LTV % |
| 4 | Cash-out proceeds | $0.00 | New loan − original loan − refi closing |
| 5 | Cash invested after refinance | $0.00 | Total cash invested − cash-out proceeds |
| 6 | Monthly P&I payment | $0.00 | Amortized over term at refi rate |
| 7 | Effective rent | $0.00 | Rent × (1 − vacancy % − management %) |
| 8 | Net operating income | $0.00 | Effective rent − rent × opex % |
| 9 | Monthly cash flow | $0.00 | NOI − P&I payment |
| 10 | Cash-on-cash return | 0.00% | Monthly cash flow × 12 ÷ cash invested after refi |
Situation: You buy a distressed house for $150,000 with 20% down ($30,000) and $4,500 in purchase closing costs. You spend $30,000 on rehab and $2,000 in holding costs. After repairs the home appraises at a $220,000 ARV and rents for $1,800/month (opex 25%, vacancy 5%, management 8%).
Refinance: A new loan at 75% LTV ($165,000), 6.5% over 30 years, with $3,000 in refi closing costs.
Calculation: Cash out = $165,000 − $120,000 − $3,000 = $42,000. Cash invested after refi = $66,500 − $42,000 = $24,500.
Situation: You buy for $200,000 with 20% down ($40,000), $6,000 closing, $50,000 rehab, and $3,000 holding. ARV is $250,000 but the market only rents it for $1,500/month (opex 30%, vacancy 8%, management 10%).
Refinance: 70% LTV ($175,000) at 7% over 30 years with $3,500 refi closing.
Calculation: Cash out = $175,000 − $160,000 − $3,500 = $11,500. Cash invested after refi = $99,000 − $11,500 = $87,500. P&I ≈ $1,164.27/mo vs. NOI of just $780/mo.
Most BRRRR lenders cap cash-out refinances at 75% of the after-repair value (some go to 80%). If your original loan plus refi closing costs plus the cash you need back exceeds 75% of ARV, the deal won't recycle all of your money. That's why the purchase price target is usually 70–75% of ARV minus rehab.
Monthly cash flow = effective rent − operating expenses − P&I payment.
Effective rent = rent × (1 − vacancy % − management %).
After a successful BRRRR your cash invested is small, so even modest cash flow can produce a strong CoC return.
Works best where distressed homes sell well below ARV — strong rehab markets with steady appraisals and rental demand.
Accurate rehab estimates and on-budget contractors are the difference between recycling your cash and trapping it.
The new mortgage must leave positive cash flow after vacancy, management, and opex — verify with local rent comps.
Not every lender does cash-out refis on recently rehabbed rentals. Confirm LTV limits and seasoning rules before you buy.
The BRRRR strategy — Buy, Rehab, Rent, Refinance, Repeat — is a way to grow a rental portfolio while recovering most of the cash you put into each deal. The core idea: buy below market value, force appreciation with rehab, then refinance the improved property and pull out the cash you originally invested. That cash becomes the seed money for the next property.
Target properties at 70–75% of ARV minus rehab costs. The gap between purchase price and after-repair value is the equity that makes the refinance work.
Renovations should increase value at least dollar-for-dollar. Kitchen, baths, flooring, and curb appeal typically offer the best return on investment.
A cash-out refinance replaces your hard-money or purchase loan with a long-term mortgage at 70–80% of the new appraisal. The cash returned is your next down payment.
Each cycle should leave you owning a cash-flowing rental with a fraction of the original cash still in the deal — the engine of portfolio growth.
Four numbers decide whether a deal succeeds: the purchase price, the rehab cost, the after-repair value, and the rent. If the ARV and rent are too optimistic, the refinance returns less cash and the mortgage eats the cash flow. Run the math on this calculator before you commit — and pad your rehab budget by 10–20%.
⚠️ Risk Warning: The BRRRR strategy involves significant risk. Rehab costs often overrun budgets, refinance appraisals can come in lower than the estimated ARV, tenants and vacancies are unpredictable, and cash flow estimates are projections, not guarantees. Financing terms, LTV limits, and seasoning requirements vary by lender and market. This calculator is provided for educational purposes only and is not financial, legal, or tax advice — do full due diligence and consult qualified professionals before making any investment decision.