Brrrr Calculator
Analyze Buy, Rehab, Rent, Refinance, Repeat strategy returns for real estate investing. Enter values for instant results with step-by-step formulas.
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer
Brrrr Calculator
Calculator
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Formula: Cash-on-Cash Return = Annual Cash Flow / Cash Left in Deal x 100
Worked example — Cash Left: $8,100 | Cash Flow: $258/mo | CoC Return: 38.2%
Formula
Cash-on-Cash Return = Annual Cash Flow / Cash Left in Deal x 100
Where Annual Cash Flow = (Monthly Rent x (1 - Vacancy)) - Mortgage Payment - Expenses) x 12. Cash Left in Deal = Total Investment - Refinance Cash Out. The goal is to minimize cash left while maximizing cash flow.
Worked Examples
Example 1: Successful Full Capital Recovery
Problem:Buy a distressed duplex for $120,000, spend $30,000 on rehab. ARV is $200,000. Rent for $1,800/month. Refinance at 75% LTV with 7% rate.
Solution:Total cash in = $120,000 + $30,000 + $3,600 closing = $153,600 Refinance loan = $200,000 x 75% = $150,000 Cash out after refi closing = $150,000 - $4,500 = $145,500 Cash left in deal = $153,600 - $145,500 = $8,100 Mortgage payment = $998/mo Cash flow = $1,656 (rent after vacancy) - $998 - $400 = $258/mo
Result:Cash Left: $8,100 | Cash Flow: $258/mo | CoC Return: 38.2%
Example 2: No Money Left in Deal
Problem:Purchase for $80,000, rehab $20,000, ARV $160,000, rent $1,400/month, refinance at 75% LTV, 7% rate.
Solution:Total cash in = $80,000 + $20,000 + $2,400 = $102,400 Refinance loan = $160,000 x 75% = $120,000 Cash out = $120,000 - $3,600 = $116,400 Cash left = $102,400 - $116,400 = -$14,000 (profit!) Mortgage = $798/mo Cash flow = $1,288 - $798 - $350 = $140/mo
Result:Full Recovery + $14K profit | Cash Flow: $140/mo | Infinite CoC!
Frequently Asked Questions
What is the BRRRR strategy in real estate investing?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat and is a popular real estate investment strategy for building a rental portfolio with limited capital. The process starts by purchasing a distressed property below market value, then renovating it to increase its value (forced appreciation). Once rehabbed, you place a tenant and collect rent to create positive cash flow. After a seasoning period, typically six to twelve months, you refinance based on the new higher appraised value through a cash-out refinance. If executed correctly, you recover most or all of your original investment capital, which you then use to repeat the process on another property. This strategy allows investors to accumulate multiple rental properties while recycling the same initial capital pool.
How do you calculate cash-on-cash return for BRRRR?
Cash-on-cash return measures the annual pre-tax cash flow relative to the actual cash you have invested in the deal. After a BRRRR refinance, your cash left in the deal is your total initial investment minus the cash received from the refinance. The formula is: Cash-on-Cash Return equals Annual Cash Flow divided by Cash Left in Deal, multiplied by 100. If you invested $155,000 total and received $147,000 back from the refinance, you have $8,000 left in the deal. If the property generates $3,600 annual cash flow, your cash-on-cash return is 45 percent. In a perfect BRRRR deal where you recover all your capital, the cash-on-cash return is technically infinite because your denominator approaches zero, meaning you are earning returns on none of your own money.
What is a good after-repair value for a BRRRR deal?
For a successful BRRRR deal, most investors target an all-in cost (purchase plus rehab plus closing costs) at or below 70 to 75 percent of the after-repair value (ARV). This is often called the 70 percent rule or 75 percent rule. If a property has an ARV of $200,000, your total investment should ideally be $140,000 to $150,000 or less. This margin ensures that when you refinance at 75 percent LTV (loan-to-value), the refinance proceeds cover your initial investment. The accuracy of the ARV estimate is critical because it determines your refinance amount. Overestimating ARV is the most common BRRRR mistake. Use recent comparable sales within a half mile radius sold within the last three to six months, and be conservative in your estimates to protect against market fluctuations.
How long do you have to wait to refinance a BRRRR property?
Most lenders require a seasoning period before allowing a cash-out refinance, typically ranging from six to twelve months after purchase or after the property deed is recorded. Conventional lenders through Fannie Mae and Freddie Mac generally require a six-month seasoning period before allowing a cash-out refinance based on a new appraisal. Some portfolio lenders, credit unions, and private lenders may have shorter or no seasoning requirements, though they often charge higher interest rates. During the seasoning period, investors typically fund the purchase and rehab using hard money loans, private money, cash, or home equity lines of credit. These short-term financing costs should be factored into the total deal analysis. The refinance itself takes 30 to 60 days to process after application.
What are the risks of the BRRRR strategy?
The BRRRR strategy carries several significant risks that investors must understand and mitigate. Rehab cost overruns are common, especially for inexperienced investors, and can erode or eliminate projected profits. Unexpected structural, plumbing, or electrical issues discovered during renovation can add thousands to the budget. Appraisal risk is substantial because the entire strategy depends on the property appraising at or above your projected ARV during refinancing. If the appraisal comes in low, you cannot pull out enough capital to recycle. Market timing risk exists because property values can decline between purchase and refinance. Interest rate changes can increase your refinance mortgage payment, reducing or eliminating cash flow. Tenant risk includes vacancies, late payments, and property damage. Finally, the short-term financing used during the rehab phase typically carries high interest rates, so delays in construction or refinancing can significantly increase holding costs.
References
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer · Editorial policy
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