BRRRR Calculator

How to use this calculator

1. 1

   Enter purchase price and rehab cost

   The purchase price is what you pay for the distressed property. Rehab cost includes all renovation expenses — materials, labor, permits, and a contingency buffer. Together these make up your total investment before refinancing.

2. 2

   Enter the After Repair Value (ARV)

   ARV is the estimated market value of the property after all renovations are complete. Get this from a local real estate agent's comparative market analysis (CMA) or a licensed appraiser. This is the most important number in the BRRRR strategy.

3. 3

   Set the refinance LTV

   Most lenders offer 70–75% LTV on investment property cash-out refinances. The refinance loan amount is ARV × LTV%. A higher ARV and higher LTV means more equity pulled out. Some lenders require a 6–12 month seasoning period before they will refinance.

4. 4

   Enter refinance rate and term

   The interest rate and term for your new refinanced loan determine your new monthly mortgage payment. This is the payment you will carry on the rental property going forward.

5. 5

   Enter monthly rent and expenses

   Monthly rent is what tenants pay. Monthly expenses include property taxes, insurance, property management fees (typically 8–10% of rent), maintenance reserves, and vacancy allowance. Do not include the mortgage payment — that is calculated separately.

6. 6

   Review cash left in deal and cash flow

   The key BRRRR metric is cash left in the deal. If negative, you pulled out more than you invested — your effective cash-on-cash return is infinite. If positive, you still have capital in the deal and the cash-on-cash return tells you how efficiently that capital is working.

Formula

Total Invested      = purchasePrice + rehabCost
Refinance Loan      = ARV × (refinanceLTV / 100)
Equity Pulled Out   = refinanceLoan − purchasePrice
Cash Left in Deal   = totalInvested − refinanceLoan

New Monthly Payment = refinanceLoan × [r(1+r)^n] / [(1+r)^n − 1]
  where r = refinanceRate / 12 / 100, n = refinanceTerm × 12

Monthly Cash Flow   = monthlyRent − monthlyExpenses − newMonthlyPayment
Annual Cash Flow    = monthlyCashFlow × 12

Cash-on-Cash Return = (annualCashFlow / cashLeftInDeal) × 100
  (if cashLeftInDeal ≤ 0: "Infinite — all capital recycled")

The BRRRR strategy works by forcing equity through renovation. You buy below market value, improve the property to increase its value (ARV), rent it to generate income, then refinance based on the new appraised value to pull out your invested capital. The goal is to recover as much of your initial investment as possible in the refinance so you can deploy it into the next deal. Cash-on-cash return compares annual cash flow to the cash still tied up in the deal — infinite if you recovered everything. Example: purchase $150,000 + rehab $40,000 = $190,000 invested. ARV $280,000, 75% LTV = $210,000 refinance loan. Cash left in deal = $190,000 − $210,000 = −$20,000 (you pulled out $20,000 more than invested). Monthly cash flow = $2,000 rent − $500 expenses − $1,124 mortgage = $376/month.

Worked Example

Frequently Asked Questions

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