About BRRRR Calculator
Free BRRRR calculator for real estate investors. Enter purchase price, rehab costs, ARV, and rental income to calculate cash-out equity, monthly cash flow, and ROI instantly.
How to use
- Enter the purchase price of the distressed property and your estimated rehab costs. Be thorough with rehab estimates — include materials, labor, permits, and a 10-15% contingency buffer. A common mistake is underestimating rehab by 20-30%, which can turn a profitable BRRRR deal into a loss.
- Input the after-repair value (ARV) based on comparable sales within a half-mile radius that sold in the last 3-6 months. The ARV determines how much you can refinance out, which is the entire basis of the BRRRR strategy. Overestimating ARV is the single biggest risk in any BRRRR deal.
- Set your refinance loan-to-value (LTV) ratio — most lenders offer 70-80% LTV on investment property refinances. At 75% LTV on a $300,000 ARV, you can refinance $225,000. If your total investment (purchase + rehab) was $200,000, you recover all your capital plus $25,000.
- Add expected monthly rental income based on comparable rentals in the area. Include realistic operating expenses: property taxes, insurance, maintenance (budget 5-10% of rent), property management (8-12% of rent if not self-managing), and vacancy allowance (5-8%).
- Review your cash-out amount, monthly cash flow after all expenses, cash-on-cash return, and total ROI. A successful BRRRR deal recovers 100% of invested capital while generating positive monthly cash flow of at least $200-$400 per unit.
- Adjust purchase price and rehab budget to stress-test the deal. What if rehab costs 20% more? What if rent is $100/month less than expected? If the deal still works under pessimistic assumptions, it is a strong candidate.
Frequently asked questions
What is the BRRRR strategy?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a real estate investing method where you purchase a distressed property below market value, renovate it to increase its value, rent it out to tenants, refinance based on the new higher appraised value (pulling out most or all of your original investment), and repeat the process with the recovered capital. The power of BRRRR is infinite return potential: if you recover 100% of your cash through refinancing, your return is technically infinite because you have no money left in the deal but still own a cash-flowing asset.
How much equity do I need to leave in?
Most lenders require 20-25% equity after refinancing, meaning the ARV must be high enough for a 75-80% LTV loan to cover your total investment (purchase + rehab + carrying costs). For example, if you invested $180,000 total (purchase + rehab), you need an ARV of at least $225,000 to refinance at 80% LTV and recover your full investment. Some credit unions and portfolio lenders offer up to 80% LTV on investment refinances, while conventional lenders typically cap at 75%. The remaining equity is your built-in safety margin.
What is a good cash-on-cash return for BRRRR?
Most BRRRR investors target 8-12%+ cash-on-cash return on any capital left in the deal after refinancing. However, the ideal BRRRR deal recovers 100% of capital, making the cash-on-cash return infinite (any cash flow on zero invested capital). In practice, most investors leave $5,000-$15,000 in the deal. A property generating $300/month cash flow with $10,000 left in delivers a 36% cash-on-cash return. Compare this to a traditional rental purchase where 25% down on a $300,000 property ($75,000 invested) yielding $300/month is only a 4.8% cash-on-cash return.
How long does a typical BRRRR rehab take?
Cosmetic rehabs (paint, flooring, fixtures, landscaping) take 4-8 weeks. Moderate rehabs (kitchen, bathrooms, some structural) take 3-5 months. Full gut renovations take 6-12 months. Most lenders require a 6-12 month seasoning period before they allow a cash-out refinance based on the new appraised value, so factor this holding period into your timeline and carrying cost calculations. Some credit unions and portfolio lenders offer shorter or no seasoning periods.
What are the biggest risks with BRRRR?
The top three risks are: (1) Overestimating ARV, which means the refinance does not cover your investment and capital gets trapped in the deal. Always use conservative comparable sales, not optimistic projections. (2) Underestimating rehab costs — always add a 15% contingency to your contractor quotes. (3) Overestimating rental income, which turns a cash-flowing property into a monthly liability. Get actual rental comparables from the neighborhood, not broad market averages. Additionally, rising interest rates can reduce refinance proceeds and increase monthly payments.
How do I find BRRRR-eligible properties?
Look for properties significantly below market value due to cosmetic distress, deferred maintenance, estate sales, or motivated sellers. Common sources include MLS listings that have been sitting 60+ days, auction properties, direct mail campaigns to absentee owners, wholesalers, and driving for dollars (finding visibly distressed properties and contacting owners directly). The 70% rule is a useful screen: pay no more than 70% of ARV minus repair costs. On a property with $250,000 ARV and $40,000 in repairs, your maximum purchase price is $135,000. If you are evaluating a property as a flip rather than a rental hold, use the
House Flip Calculator to compare the profit potential of each exit strategy.
Can I do BRRRR in Canada?
Yes, but Canadian BRRRR deals face some additional considerations. Most Canadian lenders require a 12-month seasoning period before refinancing at the new appraised value, compared to 6 months in the US. Refinance LTV is typically limited to 80% for investment properties. Land transfer tax applies on purchase (not deductible), and rental income is taxed at your marginal rate. Capital gains on eventual sale are 50% taxable. Despite these factors, BRRRR is widely practiced in Canadian markets, particularly in secondary cities where purchase prices are low enough relative to rental income to generate positive cash flow.
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