BRRRR Calculator
Buy, rehab, rent, refinance, repeat — model how much capital the refinance actually returns, and what a low appraisal does to the cash you leave trapped in the deal.
BRRRR Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Excludes holding costs during the rehab, which can be substantial on a long renovation.
- Assumes the refinance is available at the LTV entered; seasoning requirements are not modelled.
- Operating expenses are taken as a percentage of rent rather than itemised.
In short: BRRRR recycles capital through a cash-out refinance at the new value. All-in at 149,540 against a 210,000 ARV, a 75% refinance releases 157,500 — all capital back. A 10% low appraisal cuts that by 15,750 and traps 7,790 instead.
Formula
all-in = purchase + rehab + buying costs
refinance = ARV × LTV · left in = all-in − refinance
[('all-in', 'every dollar deployed to acquire and renovate'), ('ARV', 'after-repair value, what the appraiser will support'), ('refinance LTV', 'the share of ARV a lender will advance'), ('left in', 'capital that stays trapped in the property')]
Worked Example
- Buy well below the after-repair value — the 70% rule is the usual filter.
- Total every dollar deployed: purchase, rehab and buying costs.
- Establish what the property will appraise for once finished.
- Apply the lender's refinance LTV to that value.
- Subtract to find what stays in the deal, then test the result against a ten per cent lower appraisal.
A 127,000 purchase plus 20,000 of rehab and 2,540 of buying costs is 149,540 all-in. At a 210,000 ARV a 75% refinance releases 157,500 — 105.32% of capital recycled, with 7,960 of surplus. Post-refinance coverage is 1.0307x on 12,960 of NOI, which is thin. If the appraisal lands at 189,000 instead, the loan falls to 141,750 and 7,790 is trapped: a 15,750 swing from a 21,000 valuation miss.
Strengths & Limits Of This Model
Where this engine is strong
- Quantifies exactly how much capital the refinance returns
- Shows the appraisal swing as an exact multiple of the miss
- Refuses the infinite-return fallacy and explains why
Where it stops
- Rehab holding costs excluded
- Seasoning not modelled
Practical Use Cases
Testing whether capital recycles
Establishing before purchase how much will come back at refinance.
Stress-testing the appraisal
Seeing what a conservative valuation does to trapped capital.
Checking the refinance will be approved
Confirming coverage clears the lender's minimum at the new loan.
Comparing BRRRR against a flip
Weighing recycled capital and a retained asset against a realised profit.
Sizing the rehab budget
Finding how much work the after-repair value can justify.
Methodology & Editorial Standards
All-in cost sums purchase, rehab and buying costs; holding costs during the renovation are deliberately excluded and flagged as a separate budget item rather than silently omitted. Refinance proceeds apply the LTV to after-repair value, which is what lenders actually advance against. The appraisal sensitivity uses a ten per cent shortfall and demonstrates that the swing in trapped capital equals the valuation miss multiplied by the refinance LTV — an exact relationship, not an approximation. Post-refinance coverage is computed on a thirty-year amortisation.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
BRRRR Calculator — 10 Expert FAQs
10 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. You acquire below market, renovate to force appreciation, let the property, then take a cash-out refinance against the higher value to recover your capital and deploy it again. The asset is retained rather than sold, which is the essential difference from a flip.
What is the 70% rule in BRRRR?
The same filter flippers use: pay no more than seventy per cent of after-repair value minus the rehab budget. It matters more here than in a flip, because the gap between what you spend and what the property appraises for is precisely the capital the refinance can return.
Why is my cash-on-cash return infinite?
It is not infinite, it is meaningless — you cannot divide by zero. When all capital is recovered the measure simply stops working, which is a signal to ask better questions: what does the property yield unlevered, does it cover the new debt service, and how thin is the coverage? A deal with no cash left in and a 1.03x coverage ratio is fragile, not perfect.
What happens if the appraisal comes in low?
Capital is trapped, in direct proportion. The loss is the valuation shortfall multiplied by the refinance LTV, so at 75% every dollar of optimistic ARV costs seventy-five cents of recoverable capital. This is the most common way BRRRR deals disappoint, and it is why the ARV should be set from closed comparable sales rather than hope.
What refinance LTV should I expect?
Most lenders cap a cash-out refinance on an investment property at seventy to seventy-five per cent of appraised value. Some go lower for smaller loans or weaker markets. Model at the conservative end, because the difference between 70% and 75% on a 210,000 valuation is over ten thousand pounds of recoverable capital.
Is there a seasoning requirement?
Usually. Many lenders require the property to be held for six to twelve months before they will lend against the new appraised value rather than your purchase price. Check before buying, because a seasoning requirement determines how long your capital is committed and therefore how fast the strategy can actually repeat.
Is BRRRR good for beginners?
Generally not. It combines the renovation risk of flipping with the underwriting and appraisal risk of refinancing, and adds the operational demands of letting. The common failures — underestimating rehab, overestimating ARV, and a conservative appraisal — all compound. A straightforward buy-and-hold is a better first purchase.
Are the refinance proceeds taxable?
Loan proceeds are borrowed money, not income, so they are generally not taxed on receipt in most jurisdictions. That is a genuine advantage of refinancing over selling. It also means you now owe the money, and the larger loan raises debt service and lowers coverage permanently.
How is this different from a flip?
The exit. A flip sells and realises profit as cash, usually taxed as ordinary income. BRRRR refinances, recovers capital as untaxed loan proceeds, and keeps an income-producing asset. BRRRR builds a portfolio; flipping builds a balance.
What if the numbers leave capital trapped?
That is not automatically a failure — it is a normal buy-and-hold with a lower cash-on-cash return, and it may still be a sound investment. The mistake is continuing to call it BRRRR and planning the next acquisition on capital that never came back.