BRRRR calculator
Buy, rehab, rent, refinance, repeat. Two questions decide whether it works: how much of your cash comes back at the refinance, and does the rent carry the new loan?
These are example numbers so you can see how it works — replace them with your deal.
Rent collected between lease-up and the refinance is ignored — conservative.
This is the 70% rule: ARV × 70% − repairs. The price does not change when you change repairs — the profit does.
ARVSignal provides investor estimates for educational and underwriting purposes. They are not appraisals, are not USPAP-compliant, and are not valuations for lending. The calculator works only from the numbers you enter.
Don’t know the ARV — or the rent?
ARVSignal finds the comps, rejects the bad ones and shows you why — then works out the offer. 7-day free trial, 5 analyses.
How it works
BRRRR is a flip that ends in a refinance instead of a sale. You buy and renovate with short-term money, then replace it with a long-term loan sized to the finished value. If the new loan is large enough, it pays off the first one and returns most of the cash you put in.
Cash in = down payment + unfinanced repairs + buying costs + loan costs + holding costs
Refinance proceeds = new loan − refinance closing costs − payoff of the first loan
Cash left in the deal = cash in − refinance proceeds
The new loan is a share of ARV — 75% is common — so the whole strategy is a bet that the property appraises at the value you underwrote. If it appraises low, the cash stays in the deal.
Then the rent has to pay for the loan you just took:
Net operating income = rent − reserves (management, vacancy, maintenance) − taxes − insurance − other fixed costs
Cash flow = NOI − mortgage payment
DSCR = NOI ÷ mortgage payment
DSCR — debt service coverage ratio — is the number rental lenders underwrite to. Many require at least 1.25: the property must earn 25% more than its loan payment. Under 1.00 the rent does not cover the mortgage at all. The DSCR here uses principal and interest; lenders who include taxes, insurance and association dues in the payment will read lower.
A worked example
The same $300,000 ARV house bought for $125,000 with $85,000 of repairs on hard money, refinanced in month 6 at 75% of ARV, 6% over 30 years. Rent is $2,400.
- Cash in before the refinance: $28,506
- New loan $225,000, less $5,625 closing and the $197,500 payoff → $21,875 back
- Cash left in the deal: $6,631
- New mortgage $1,349 a month · NOI $1,450 · cash flow $101 a month
- DSCR 1.07 — it covers the loan, but short of the 1.25 many lenders want
Nearly all the cash comes back, yet the rent barely carries the debt. That tension is the usual shape of a BRRRR: pulling more cash out means a bigger payment.
Common mistakes
- Refinancing at the price you hope for
- The lender uses its appraiser’s value, not yours. Run the numbers at a lower ARV to see how much cash stays in if the appraisal disappoints.
- Counting rent with no reserves
- Management, vacancy and maintenance are real costs even in months when you pay none of them. The defaults set aside 25% of rent.
- Ignoring the seasoning period
- Many lenders will not refinance at the new value until you have owned the property for about six months. Every one of those months carries the short-term loan.
- Maximizing cash out at any cost
- A higher loan-to-value returns more cash and raises the payment. Watch what it does to DSCR and cash flow.
Questions
›What does BRRRR stand for?
Buy, rehab, rent, refinance, repeat. You buy and renovate a property with short-term financing, rent it out, refinance into a long-term loan based on its new value, and use the returned cash for the next one.
›What is a good DSCR for a BRRRR?
Many DSCR lenders require at least 1.25, meaning net operating income is 25% higher than the loan payment. Between 1.00 and 1.25 the rent covers the loan with little margin; below 1.00 it does not cover it.
›What does "cash left in the deal" mean?
It is the cash you put in before the refinance minus what the refinance returns. Zero or negative means you recovered all of it. Whatever is left is the money your cash-on-cash return is measured against.
›Why is the rent field empty?
Because the rent is yours to supply here — this calculator does not look up a property. Inside ARVSignal the field starts from a rent estimate for the address, labeled with its range and source.
More free calculators
- MAO calculatorYour maximum allowable offer, opening offer and buyer price on a wholesale deal.
- Flip calculatorProfit on a fix-and-flip after financing, holding and selling costs — or the most you can pay.
- Rehab calculatorA first-pass repair budget from living area, state and level of work.
- ARV calculatorAfter-repair value from comps you choose, with the range they imply.