BRRRR Calculator

How to read this result

The headline is the cash still trapped in the deal after the refinance. On the default example — $180,000 purchase, $45,000 rehab, $320,000 ARV, 75% refinance — it is −$5,700. That negative sign is the point of the strategy: the refinance returns the entire $229,500 all-in cost and $5,700 more.

The breakdown shows how that number is built: the all-in cost, the new loan at the refinance, the closing costs on that loan, and the resulting cash left. Below those, it shows the post-refinance cash flow and the cash-on-cash return on whatever cash remains.

What BRRRR measures

The strategy is a sequence: buy below market, renovate, lease, refinance at the new value, and reuse the recovered capital. The calculator reduces the refinance step to four lines:

All-in cost = Purchase price + Closing costs + Rehab budget
New loan = ARV × Refinance LTV
Refinance costs = New loan × Refinance cost %
Cash left in the deal = All-in cost − New loan + Refinance costs

Cash left is the number that matters because it is the capital the deal still consumes. A project that leaves $40,000 in the property is a different investment from one that leaves nothing in it, even if the monthly cash flow is identical.

The default deal, line by line

The deal works because the ARV is high enough relative to the all-in cost. At 75% of $320,000, the new loan of $240,000 covers the $229,500 spent plus the $4,800 of refinance costs, with $5,700 left over. If the ARV had been $310,000, the loan would have been $232,500 and $1,800 would have stayed in the deal.

When the deal returns all of your capital

When cash left is zero or negative, the tool reports that the capital is fully recovered and shows the post-refinance cash-on-cash as ∞, with an explanation. That is not a claim of infinite returns. Cash-on-cash is a ratio, and the ratio has no denominator when no cash remains. The honest statement is that the return on cash invested is undefined because the investment has been recovered.

The extra cash out is also not profit. It is borrowed against the equity created by the purchase and the renovation. Turning that equity into spendable cash does not by itself create a gain, and how it is treated for tax purposes is outside this calculator.

The refinance LTV is the lever

Almost nothing moves the result as much as the loan-to-value on the refinance. The table below holds the property and the rate fixed and changes only the LTV.

Two things happen as the loan grows. Cash left falls, eventually below zero — that is the capital-recovery goal. And cash flow falls, because the higher loan costs more to service. At 80% LTV this deal no longer covers its debt service plus reserves, even though more cash came out at closing.

The cash-on-cash column is worth reading carefully. It rises from 14.31% at 65% LTV to 23.68% at 70% while cash flow is still positive, because the denominator shrinks faster than the numerator. The moment the denominator reaches zero, the ratio stops being defined. That is why post-refinance cash-on-cash and post-refinance cash flow have to be read together.

Why cash left matters more than cash flow

Two BRRRR deals can show the same post-refinance cash flow and be completely different investments. One has $60,000 of capital still in the property; the other has none. The first is a hold that happens to include a renovation. The second is a BRRRR, because the capital is available to buy the next property.

That is why the headline of this tool is cash left rather than cash flow. Cash flow pays you this year; recovered capital is what lets the strategy repeat. Both matter, but only one of them scales.

The refinance also resets the cost of debt. The acquisition loan was short-term and expensive; the new loan is long-term and amortising, and its rate becomes the property's cost of capital for as long as it is held. A refinance that recovers the capital but locks in a rate the rent cannot support is arithmetic moving in two directions at once.

The ARV carries the deal

Of the four inputs, the ARV is the one you do not control. The table below holds the purchase, the rehab and the refinance terms fixed and changes only the after-repair value.

Each $10,000 of ARV is worth about $7,500 of new loan at 75% LTV, less about $150 of refinance costs. So a $10,000 appraisal miss moves cash left by roughly $7,350 and reduces monthly cash flow by about $51, because the larger loan costs more to service.

An ARV built from closed comparable sales in the same condition and location is an estimate. An ARV built from active listings, or from renovated sales in a better neighbourhood, is an assumption. The gap between the number entered here and the number the appraiser supports is the largest single risk in the refinance.

What this calculator does not model

The arithmetic is deliberately narrow. It does not include acquisition financing costs, the holding costs while the rehab runs, the time between purchase and refinance, or the tax treatment of the cash-out. It also does not check whether the property qualifies for the refinance: seasoning rules, appraisal, credit and the lender's coverage floor all sit outside the calculation.

Those omissions matter because they are where BRRRR deals fail. A rehab that runs three months long adds holding costs and delays the refinance. An appraisal below the ARV reduces the loan. A lender that requires six months of ownership before lending against the new value changes the timeline entirely. None of that shows up in the cash-left figure, so it has to be checked separately.

Checking a BRRRR before you commit

Four inputs decide most of the outcome: the purchase price, the rehab cost, the ARV and the refinance terms. Be conservative on the first two and sceptical about the third — the ARV is the only one that depends on someone else's opinion of value. Then run the refinance through the DSCR calculator to see what coverage the new loan would have at the lender's target, because a loan can be small enough to close the BRRRR arithmetic and still fail the lender's coverage test.

The step-by-step guide walks through each stage of the method with a separate worked example.