BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a real-estate investing strategy where you buy a distressed property, fix it up, rent it out, then refinance into a long-term loan to pull your original cash back out and use it again on the next deal. The whole point is to recycle your capital: you ideally get most (or all) of your down payment and renovation money back while keeping a rental that pays you every month.
This BRRRR calculator models that exact sequence. Enter what you can buy the property for, what the renovation will cost, and what it will be worth after repairs (its After Repair Value, or ARV). It then refinances the property at the LTV (loan-to-value) you choose, tells you how much cash you pull out, how much you leave in the deal, and whether the rent covers the new mortgage with cash flow left over.
How to Use
- Enter the Purchase Price — what you agree to pay the seller for the distressed property. In a true BRRRR you usually buy it with cash or a short-term hard-money loan, so this is your all-in acquisition cost.
- Add your Rehab Cost — the full budget to bring the home up to rent-ready condition. Underestimating this is the most common way deals go sideways, so build in a contingency.
- Set the After Repair Value (ARV) — what a comparable renovated home in the same neighborhood would actually appraise for. Pull this from recent comparable sales (comps), not from what you hope it will be worth.
- Choose your Refinance LTV. Most rental lenders will refinance at 75% of the ARV. A higher LTV pulls more cash out but leaves you thinner equity; a lower LTV leaves more of your money in the deal.
- Enter the Refinance Interest Rate and Loan Term on the new permanent loan. Investors usually pick a 30-year amortization to keep the monthly payment low and protect cash flow.
- Type the Projected Monthly Rent the renovated home will command, and set Operating Expenses as a percentage of rent. A common rule of thumb is 25–50% to cover vacancy, property tax, insurance, maintenance and property management.
The result card shows your total cash needed up front, the new refinance loan, the cash you pull out, the cash you leave in the deal, the new monthly mortgage, your net operating income, and your resulting monthly and annual cash flow — plus the cash-on-cash return on whatever capital you left in.
The BRRRR Math
The refinance is the engine of the whole strategy. Once the property is rented and seasoned, the lender writes a new permanent loan equal to your ARV multiplied by your chosen LTV:
New Loan = ARV × LTV%
On a $300,000 ARV at 75% LTV, that new loan is $225,000. If you bought the house for $200,000 and put $50,000 into rehab, you spent $250,000 of your own money. Pulling out $225,000 means only $25,000 of your cash stays in the deal — and you now own a tenant-paying asset worth $300,000.
The new mortgage payment uses the standard amortization formula used by Fannie Mae, Freddie Mac and every major lender:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
where P is the new loan balance ($225,000), r is the monthly interest rate (the annual rate divided by 12), and n is the number of monthly payments (the loan term in years times 12). At 7.0% for 30 years, that payment is about $1,497 per month.
Net operating income (NOI) strips out the running costs of the property:
NOI = Monthly Rent × 12 × (1 − Operating Expenses%)
At $2,500 monthly rent with 25% operating expenses, annual NOI is $22,500, or $1,875 per month. Subtract the $1,497 mortgage and you are left with about $378 per month of positive cash flow — roughly $4,537 a year on only $25,000 left in, a cash-on-cash return near 18%.
Why the Refinance LTV Matters
The LTV you qualify for decides whether the deal truly recycles your capital. At 75% LTV on the example above, you pull back $225,000 of your $250,000 and keep the asset. If a lender only offers 70% LTV, the new loan drops to $210,000, leaving $40,000 of your cash in — still fine, but you recycle less capital into your next deal. Push LTV to 80% and you pull out $240,000, leaving just $10,000 in, though the higher loan raises the monthly payment and can tip the property from positive to negative cash flow. Always stress-test a lower LTV and a higher rate before you commit.
Examples
Example 1 — The classic BRRRR. You buy a tired duplex for $200,000, spend $50,000 on a full renovation, and it appraises at $300,000. You refinance at 75% LTV and pull out $225,000. Rent is $2,500 a month with 25% operating expenses, and the new 30-year loan at 7.0% costs about $1,497. You leave $25,000 of your own cash in the deal and collect roughly $378 per month in cash flow — a near 18% cash-on-cash return while your original capital is almost fully recycled.
Example 2 — A bigger, cash-flow-heavy unit. On the same $200,000 buy and $50,000 rehab, but in a market where the renovated home rents for $3,200 and you lock 6.0% on the refi, the mortgage falls to about $1,349 and monthly NOI rises to $2,400. Your monthly cash flow jumps to roughly $1,051, a cash-on-cash return over 50% on the $25,000 left in.
Example 3 — The warning case. On a $1,000,000 buy with $250,000 rehab and a $1,500,000 ARV, 75% LTV frees $1,125,000, but the 30-year loan at 6.5% costs about $7,111 a month against $6,750 of monthly NOI. The property runs negative cash flow of about $361 a month — recycling your cash does not help if the rent cannot cover the debt service. Run the numbers before you refi.
FAQ
What does BRRRR stand for?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It is a real-estate investing method in which you purchase a distressed property, renovate it, rent it to a tenant, then refinance into a long-term loan to pull your original capital back out so you can repeat the process on another property.
How much cash do I get back at the refinance?
Your cash-out equals the After Repair Value multiplied by your refinance LTV. On a $300,000 ARV at 75% LTV, the new loan — and the cash you can pull out — is $225,000. Whatever is left after that loan pays back your purchase and rehab costs is your remaining invested equity, or "cash left in the deal."
What is a good LTV for a BRRRR refinance?
Most rental portfolio lenders refinance at 75% of ARV, which is the assumption built into this calculator. Some programs offer 80%, and a few as low as 65–70%. Higher LTV recycles more of your cash but raises your monthly payment and can erase your cash flow, so always model the debt service against the rent.
What is cash-on-cash return and why does it matter here?
Cash-on-cash return is your annual before-tax cash flow divided by the actual cash you have left in the deal. Because BRRRR investors pull most of their capital out, the cash left in is often small, so even modest monthly cash flow can produce a very high cash-on-cash return — which is the core appeal of the strategy.
Why would a BRRRR deal have negative cash flow?
Negative cash flow happens when the new mortgage payment exceeds the net operating income from rent. Common causes are an LTV or interest rate that is too high, ARV or rent that is overestimated, or operating expenses (vacancy, management, maintenance) that are larger than the 25% default. This calculator flags a negative monthly cash flow so you can adjust the LTV, rate, or rent assumptions before relying on the deal.
Do I need 20% down like a normal rental loan?
Not in the classic BRRRR. You typically buy with cash or a short-term hard-money loan, renovate, and then do a cash-out refinance based on the repaired value (ARV), not the purchase price. The "down payment" in a BRRRR is effectively your purchase price plus rehab, most of which you recover at the refi.
Disclaimer
This BRRRR calculator is provided for informational purposes only and does not constitute financial, lending, tax, or investment advice. Estimates are based on the inputs you enter and standard amortization and cash-out-refinance formulas; actual loan amounts, rates, LTV, closing costs and rental income vary by lender, market, credit profile and property condition. Operating expense and ARV figures are approximations. Always confirm your refinancing terms, rental income, and projected returns directly with a qualified mortgage and real-estate professional before committing capital to any deal.