BRRRR Calculator

When cash left in reaches zero, cash-on-cash return is undefined and everyone calls it infinite. It is a genuinely excellent outcome — you own an asset producing cash flow with none of your own capital in it — but it is not a measure of how good the deal is. A property returning $50 a month with zero left in has an infinite return, and so does one returning $500.

When you hit that point, judge the deal on three things instead: monthly cash flow in dollars, DSCR on the new larger loan, and the equity you own. The example above shows all three, because the strategy’s real risk is refinancing into a payment the property can barely cover.

1. Buy below value. Purchase a property that needs work at a price low enough that purchase plus rehab plus holding sits at or below the refinance LTV of the after-repair value.
2. Rehab to the comps. Complete the work that the appraiser will credit — finished square footage, kitchens, baths, systems — rather than work that only you will notice.
3. Rent it. Get a signed lease at market rent before the appraisal. A leased property supports both the valuation and the DSCR test on the new loan.
4. Refinance. After the lender's seasoning period, refinance at the new appraised value. The new loan pays off any bridge financing and returns the remainder as cash.
5. Repeat. Deploy the recovered capital into the next property. The less cash left in each deal, the more times the same capital can be used.

The step that kills deals is the appraisal. ARV is an estimate until an appraiser signs it, and every dollar the appraisal comes in below your number costs you 75 cents of recovered capital. Set ARV from closed sales in the last six months within a tight radius, and run the calculator again with ARV 10% lower to see what happens.

How do you calculate a BRRRR deal?

Add every dollar going in — purchase price, closing costs, rehab and holding costs — then work out what comes back at the refinance, which is the after-repair value multiplied by the lender's LTV, less refinance closing costs and any bridge loan payoff. The difference is cash left in the deal, and it is the denominator of every return figure that follows.

What is an infinite return in BRRRR?

It is what happens when the refinance returns at least as much as you put in. With zero cash left in the deal, any positive cash flow divided by zero invested is undefined — conventionally called an infinite return. It is a real outcome, not a rounding artifact, and this calculator detects it and says so rather than showing an error.

What LTV will a lender give on a cash-out refinance?

For a single-unit investment property, conventional cash-out refinances typically cap at 75% of appraised value, with two-to-four unit properties often lower. Rate-and-term refinances usually allow a few points more. That cap is the hard ceiling on how much capital a BRRRR can recycle, which is why the ARV assumption is the riskiest number in the model.

How long do I have to wait before refinancing?

Most conventional lenders apply a six-month seasoning requirement before they will lend against the new appraised value rather than your purchase price. Some portfolio and DSCR lenders will go sooner. Holding costs run for the whole of that window, which is why the calculator treats them as a separate, visible line.

Why did my BRRRR leave money in the deal?

Almost always because the all-in cost was too close to 75% of ARV. The rule of thumb is to be all-in at or below the refinance LTV. On the example loaded here, being all-in at $217,850 against a $285,000 ARV — 76.4% — leaves $8,375 stuck in the property. Buying about $8,200 cheaper would have recycled every dollar.

If you are selling rather than holding, the same rehab maths appears on the fix and flip calculator and the 70% rule page. To underwrite the stabilised rental afterwards, use the rental property calculator and check the loan against the DSCR calculator.