BRRRR Method Calculator Guide
BRRRR without calculator = guessing at equity, refinance surprises, cash flow disappointment. BRRRR with calculator = accurate projections, known cash-in-deal, predictable infinite returns. Here's how to calculate BRRRR deals correctly.
What is BRRRR?
Buy: Purchase below market value
Rehab: Renovate to increase value
Rent: Place tenant, generate cash flow
Refinance: Pull out invested capital
Repeat: Recycle money into next deal
BRRRR Calculator Components
1. Purchase & Acquisition
- • Purchase Price: What you pay for property
- • Closing Costs: 2-3% of purchase
- • Initial Down Payment: 20-25% typically
- • Total Initial Investment: Down + closing
Example: $150k purchase, $37.5k down (25%), $4.5k closing = $42k initial
2. Rehab Costs
- • Renovation Budget: Itemized rehab costs
- • Contingency: 15-20% buffer for surprises
- • Holding During Rehab: Mortgage, taxes, insurance during work
- • Total Rehab Investment: Renovation + holding costs
Example: $30k rehab + $6k holding (3mo) = $36k total
3. After Repair Value (ARV)
- • Comparable Sales: Find 3-5 recent comps
- • Conservative Estimate: Use average, not highest
- • Appraisal Reality: Banks often appraise 5-10% below expectations
- • Used For Refinance: Determines how much you can pull out
Example: Comps at $215k-225k → Use $220k ARV conservatively
4. Refinance Analysis
- • Refinance LTV: 75-80% typical (use 75% to be safe)
- • Cash Out Amount: ARV × LTV - payoff original loan
- • New Loan Terms: Interest rate, payment on new loan
- • Refinance Costs: 2-3% of new loan amount
Example: $220k ARV × 75% = $165k refi - $112.5k payoff = $52.5k cash out
5. Cash Flow & Returns
- • Monthly Rent: Based on comparable rentals
- • Operating Expenses: Taxes, insurance, PM, maintenance
- • New Mortgage Payment: Based on refinanced amount
- • Monthly Cash Flow: Rent - expenses - new mortgage
Example: $1,800 rent - $650 OpEx - $950 mortgage = $200/mo cash flow
Complete BRRRR Example
Real BRRRR Deal Analysis
STEP 1: Buy
- Purchase Price: $150,000
- Down Payment (25%): $37,500
- Closing Costs: $4,500
- Initial Investment: $42,000
STEP 2: Rehab
- Renovation Costs: $30,000
- Holding Costs (3mo): $6,000
- Rehab Investment: $36,000
- Total All-In: $42k + $36k = $78,000
STEP 3: Rent
- Monthly Rent: $1,800
- Property Management (9%): -$162
- Taxes/Insurance/Maint: -$488
- NOI (before mortgage): $1,150
STEP 4: Refinance
- ARV (After Repair Value): $220,000
- Refinance at 75% LTV: $165,000
- - Payoff Original Loan: -$112,500
- - Refinance Costs (3%): -$4,950
- Cash Out: $47,550
Final Cash Flow (After Refi)
- NOI: $1,150
- New Mortgage (7.5%, 30yr): -$1,154
- Monthly Cash Flow: -$4
BRRRR Results
- Total Invested: $78,000
- Cash Recovered (Refi): $47,550
- Cash Left in Deal: $30,450
- Forced Equity Created: $70,000 (ARV - All-In)
- Property Value: $220,000
- Cash Flow: Break-even (acceptable for wealth building)
Key BRRRR Metrics to Calculate
Cash Left in Deal
Total invested - cash recovered via refinance
Goal: $0 (infinite return) or minimal amount
Forced Equity
ARV - total all-in costs
Goal: $50k-100k+ equity created
Cash-on-Cash Return
Annual cash flow ÷ cash left in deal
Goal: Infinite if $0 left, or 20%+ if cash remaining
Refinance Recovery %
Cash recovered ÷ total invested × 100
Goal: 80-100% recovery rate
BRRRR Calculator Mistakes
❌ Overestimating ARV
Bank appraisers are conservative. If you think $230k ARV, bank might say $210k. Use conservative estimates or you'll get stuck with cash in the deal.
❌ Forgetting Refinance Costs
Refinance closing costs are 2-3% of loan amount. On $165k refi = $3.3k-5k. Reduces cash-out by this amount.
❌ Using 80% LTV Assumption
Many lenders only do 75% on cash-out refinance. Using 80% = overestimating cash-out by thousands. Use 75% to be safe.
❌ Ignoring Cash Flow After Refi
Higher loan = higher payment. Make sure cash flow is still positive (or at least break-even) after refinancing.
BRRRR Success Criteria
Minimum Requirements for Good BRRRR
✓ Recover at least 80% of invested capital via refinance
✓ Create $50k+ in forced equity (ARV - total costs)
✓ Break-even or positive cash flow after refinance
✓ Purchase at least 25% below ARV
✓ Conservative ARV estimate (use lowest reasonable comp)
✓ Clear refinance path (good credit, verifiable income)
Built-In BRRRR Calculator
OnMarketCRM includes complete BRRRR calculators. Model entire BRRRR cycle, calculate refinance scenarios, project cash-left-in-deal, determine if deal works before buying. Make confident BRRRR investments.
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