BRRRR Calculator
Cash left in a BRRRR deal = (purchase + closing + rehab + holding costs + rehab-loan interest − acquisition loan) − (ARV × refinance LTV − acquisition loan payoff − refinance closing costs), and the lower that number, the more of your capital you can reuse on the next property.
Last updated: · by MakeLease Editorial Team
| Purchase price | $140,000 |
| Purchase closing costs | $4,000 |
| Rehab | $40,000 |
| Holding costs (excl. interest) | $2,000 |
| Acquisition loan interest | $5,133 |
| All-in cost | $191,133 |
| Less acquisition loan | −$112,000 |
| Your cash invested | $79,133 |
| New loan (ARV × LTV) | $180,000 |
| Pay off acquisition loan | −$112,000 |
| Refinance closing costs | −$5,000 |
| Cash out | $63,000 |
| Cash left in deal | $16,133 |
| All-in cost ÷ ARV | 79.6% |
| Equity after refinance | $60,000 |
| New monthly payment | $1,197.54 |
The calculator is free to use without an account. Saving and comparing deals needs a free account.
How it's calculated
Holding costs = months × (monthly carrying costs) + acquisition loan × rate ÷ 12 × months
All-in cost = purchase + purchase closing + rehab + holding costs
Cash invested = all-in cost − acquisition loan
Cash out = ARV × refinance LTV − acquisition loan payoff − refinance closing costs
Cash left in deal = cash invested − cash out
- Acquisition loan is the short-term loan used to buy the property, such as hard money or a private loan, as a percentage of the purchase price. The calculator assumes it is interest-only and funds only the purchase, so you pay the rehab yourself. Enter 0 for an all-cash purchase.
- Holding costs cover the months between closing and the refinance: taxes, insurance, utilities and lawn care, plus the monthly interest on the acquisition loan. The longer the rehab and any lender waiting period, the larger this line.
- ARV (after-repair value) is what an appraiser will say the finished property is worth. The refinance lender sizes the new loan as a percentage of that value, the loan-to-value ratio (LTV).
- Cash out is what reaches your bank account after the new loan pays off the old one and covers its own closing costs. If it is negative, you have to bring money to the refinance.
- Post-refinance cash flow is NOI (rent less vacancy and operating expenses) minus payments on the new loan. It is computed the same way as on the rental property calculator, using the refinance loan.
- DSCR is NOI ÷ annual payments on the new loan. Below 1.00x the rent does not cover the mortgage and expenses.
Worked example
You buy a dated house for $140,000 with a hard-money loan for 80% of the price at 11%, pay $4,000 to close, and spend $40,000 on the rehab. It takes 5 months to finish, rent and refinance.
- Acquisition loan: 80% × $140,000 = $112,000. Interest for 5 months: $5,133.
- Holding costs: 5 × $400 + $5,133 interest = $7,133.
- All-in cost: $140,000 + $4,000 + $40,000 + $7,133 = $191,133, which is 79.6% of the $240,000 ARV.
- Your cash invested: $191,133 − $112,000 loan = $79,133.
- The refinance lender lends 75% of $240,000 = $180,000. After paying off $112,000 and $5,000 in closing costs, you get $63,000 back.
- Cash left in the deal: $79,133 − $63,000 = $16,133. You recovered 79.6% of your capital.
- After the refinance, NOI is $15,304 a year and the new loan costs $1,197.54 a month. Cash flow is $78 a month ($933 a year), DSCR is 1.06x, and cash-on-cash on the $16,133 left in is 5.79%.
Most of the capital came back, but the trade-off shows: the bigger refinance loan leaves only $78 a month of cash flow and a DSCR close to 1.00x. Notice the $5,133 of hard-money interest too. Every extra month before the refinance adds to it, and that money never comes back out of the deal.
What's a good BRRRR deal?
A good BRRRR result is one where a large share of your capital comes back and the property still cash flows after the refinance. The ideal is that both happen: little or no cash left in, and positive cash flow with reserves for repairs and vacancy. In practice the two pull against each other. A higher refinance LTV returns more cash but adds a bigger payment, which lowers cash flow and DSCR.
Look at three numbers together. Cash left in the deal tells you how much money is stuck. Post-refinance cash flow tells you whether the property pays its own way. DSCR tells you how much room you have before the rent stops covering the loan, and many refinance lenders check it too. A deal that recovers all your capital but runs negative cash flow just moves the cost from your savings to your monthly budget.
The 70% rule
Many investors borrow a rule of thumb from house flippers: pay no more than about 70% of ARV, minus the rehab cost. It is a quick screen, not a lending standard, and it was designed for flips, where the exit is a sale. For BRRRR, the all-in cost ÷ ARV line above is a more direct test. If all-in cost is above the refinance LTV, some of your cash will stay in the deal no matter what. A low ratio leaves a cushion for an appraisal that comes in short.
Seasoning and timing
Lenders often require a waiting period, called seasoning, before they will do a cash-out refinance based on the new appraised value. The length varies by lender and loan program, so ask before you buy. Plug the full expected wait into the months field: the extra holding costs and loan interest are part of the deal.
Common mistakes
- Ignoring hard-money interest during the rehab. At double-digit rates, a few months of interest-only payments add thousands to the cash you need.
- Budgeting only for the rehab months. Finding a tenant and waiting out the lender's seasoning period both extend the hold. Count the full time to the refinance.
- Using an optimistic ARV. The appraiser, not you, sets the value. Base ARV on recent sales of comparable renovated homes and test a lower number.
- Forgetting refinance closing costs. Appraisal, title and lender fees come out of your cash out.
- Chasing an infinite return at the expense of cash flow. Pulling every dollar out can leave a loan the rent barely covers.
- Rehab overruns with no contingency. Price the scope in the rehab cost estimator and add a contingency line before you commit.
Frequently asked questions
- What does an infinite cash-on-cash return mean?
- Cash-on-cash return divides annual cash flow by the cash you still have in the deal. If the refinance pays back everything you put in, or more, the denominator is zero or negative and the ratio has no meaningful value. The calculator shows ∞ in that case. It means none of your own money is tied up, not that the property is risk-free: you now carry a larger loan and the cash flow is often thinner.
- Why does the calculator count interest on the acquisition loan?
- Hard-money and private loans used to buy and rehab a property usually charge interest every month until the refinance pays them off. Those payments come out of your pocket while the property earns no rent. The calculator treats the acquisition loan as interest-only and adds the interest for the holding months to your holding costs.
- What is seasoning in a cash-out refinance?
- Seasoning is a waiting period many lenders require between buying a property and doing a cash-out refinance based on the new appraised value. The length varies by lender and loan program. Ask your refinance lender before you buy, because a longer wait means more months of holding costs and acquisition-loan interest.
- What if the appraisal comes in below my ARV?
- The refinance loan is a percentage of the appraised value, so a lower appraisal shrinks the cash you get back dollar for dollar times the LTV. Try a lower ARV in the calculator to see how much cash would stay in the deal. If the deal only works at your most optimistic ARV, it is a risky deal.
Further reading
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