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BRRRR calculator: how to run the numbers on a BRRRR deal

By Spruce Sheets · Updated November 14, 2026 · 7 min read

BRRRR stands for buy, rehab, rent, refinance, repeat. The appeal is recycling your cash: buy below value, add value with a renovation, then refinance against the new value and take most of your money back out. Whether that actually happens depends on a handful of numbers you can work out before you make an offer. This guide runs a complete made-up deal through them.

The five numbers that decide a BRRRR deal

1. All-in cost: purchase price, purchase closing costs, rehab budget and holding costs (taxes, insurance, utilities and loan interest while the property is empty).
2. After-repair value (ARV): what the property should appraise for once renovated, based on recent comparable sales, not hope.
3. Refinance loan: ARV × the lender's maximum loan-to-value (LTV) for a cash-out refinance on an investment property.
4. Cash left in the deal: all-in cost minus what the refinance hands back after its own closing costs.
5. Cash flow on the new loan: the refinance creates a bigger loan, so the property has to carry a bigger payment.

A worked example

Step	Assumption	Amount
Buy	Purchase price (paid with cash)	$150,000
	Purchase closing costs	$4,500
Rehab	Renovation budget	$40,000
	Holding costs, 5 months × $1,200	$6,000
	All-in cost	$200,500
Value	After-repair value (ARV)	$250,000
Refinance	New loan at 75% LTV	$187,500
	Refinance closing costs	$5,000
	Cash back after refinance	$182,500
	Cash left in the deal	$18,000

The refinance doesn't return all of the money, but it returns most of it: $18,000 of the original $200,500 stays in the property.

The 75% LTV is an example. Fannie Mae's eligibility matrix currently allows up to 75% LTV for a cash-out refinance on a one-unit investment property and 70% for two to four units. Portfolio and DSCR lenders set their own limits. Ask your lender before you buy, not after the rehab.

Rent it: cash flow on the new loan

The new $187,500 loan at 7.25% over 30 years costs $1,279.08 a month in principal and interest. After the renovation, the property rents for $2,200.

Monthly	Amount
Rent	$2,200.00
Vacancy allowance (5%)	−$110.00
Effective rent	$2,090.00
Property tax ($2,800 ÷ 12)	−$233.33
Insurance ($1,300 ÷ 12)	−$108.33
Repairs (5% of rent)	−$110.00
Capital expense reserve (5% of rent)	−$110.00
Management (8% of collected rent)	−$167.20
Net operating income (NOI)	$1,361.13
Loan payment	−$1,279.08
Cash flow	$82.05

That's $984.63 a year on $18,000 left in the deal: a cash-on-cash return of about 5.5%. The DSCR (NOI ÷ loan payment) is 1.06, which is tight. Some DSCR lenders want a higher ratio, and a ratio this close to 1.0 leaves little room if rent drops or insurance rises.

This is the trade-off at the heart of BRRRR: the more cash you pull out, the bigger the loan, and the thinner the monthly margin.

What if the appraisal comes in low?

The ARV is the number you control least. If the appraiser says $230,000 instead of $250,000:

• New loan at 75%: $172,500 instead of $187,500.
• Cash left in the deal: $33,000 instead of $18,000.

A $20,000 lower appraisal leaves $15,000 more of your own money tied up, which may be the money you'd planned to use for the next deal. Run your numbers at a conservative ARV, and treat anything higher as a bonus.

Rules of thumb (and their limits)

• The 70% rule. Pay no more than 70% of ARV minus the rehab cost. Here: 70% × $250,000 − $40,000 = $135,000. Our purchase price of $150,000 is above that, which is why cash is left in the deal. The rule is a quick screen, not a law; it ignores holding costs, closing costs and today's interest rates.
• All-in cost as % of ARV. Purchase plus rehab is $190,000, or 76% of ARV here. If the refinance lends 75% of ARV, anything above roughly 75% all-in (before closing and holding costs) means cash stays in the deal.

Seasoning: when you can actually refinance

Timing matters as much as value. Lenders use "seasoning" rules for how long you must own the property or how old the existing loan must be:

• For Fannie Mae conventional cash-out refinances, at least one borrower must generally have been on title for six months before the new loan is disbursed, and any existing first mortgage being paid off must be at least 12 months old (measured note date to note date).
• Fannie Mae's delayed financing exception lets cash buyers refinance within six months of purchase, but the new loan can be no more than the documented amount you paid for the property plus closing costs on the new loan. Rehab spending doesn't count toward that cap, so it usually doesn't capture the added value.
• DSCR and portfolio lenders set their own seasoning rules, and some will use the appraised value sooner. Rates and fees are often higher.

If you finance the purchase and rehab with a short-term loan, its interest is a holding cost, and a 12-month seasoning rule can mean paying that interest longer than planned. Put the real timeline in your numbers.

Short-term rental or long-term rental after the rehab?

Some investors plan to rent a BRRRR property short-term because the gross income can be higher. That changes the numbers in two ways. First, operating costs are much higher: cleaning, supplies, furnishing, platform fees, utilities and more management time. Second, the refinance lender has to accept the income. A conventional lender underwrites on your personal income and may count only part of the rent; a DSCR lender may use a market rent estimate or short-term rental income history, depending on its rules. Run the deal both ways and make sure the long-term rental version still works, so a slow season or a local short-term rental rule change doesn't sink it.

What to track during the project

• Every invoice and receipt for the rehab, with dates. Improvements generally become part of your basis for depreciation, so you'll need them at tax time and when you sell.
• Actual holding costs month by month, compared with your estimate.
• The date you took title and the note date of any loan, for seasoning rules.
• Photos before and after, which help the appraiser understand the scope of the work.

Holding costs people underestimate

• Time. Renovations run late. Five months can become eight.
• Financing costs. Points and interest on a hard-money or bridge loan.
• Utilities and insurance while vacant (vacant-property insurance can cost more).
• Property tax, which keeps accruing during the rehab.
• The gap between rehab and refinance: you may wait for a tenant, then for the appraisal, then for closing.

Repeat: does the deal let you do the next one?

The "repeat" step only works if enough cash comes back. In the base case, $182,500 of $200,500 came back. If your next deal needs $200,000 again, you're $18,000 short, plus whatever reserves you want to keep. It's worth tracking cash left in each deal over time, along with the actual cash flow after the refinance, so you see whether the strategy is building a portfolio or slowly locking up your capital.

A BRRRR checklist

• Comparable sales that support the ARV, from renovated properties similar to yours.
• A written rehab scope and budget with a contingency (10–20% is common practice).
• The lender's maximum LTV, seasoning rules, DSCR minimum and expected rate, confirmed before you buy.
• Holding costs for a realistic (not best-case) timeline.
• Cash flow and DSCR on the new loan, at a slightly lower rent than you expect.
• Cash left in the deal at a lower appraisal.

General information with a made-up example. Not financial, investment, mortgage or tax advice. Lender rules change; confirm current requirements with your lender.

Frequently asked questions

What does BRRRR stand for?

Buy, rehab, rent, refinance, repeat. You buy a property that needs work, renovate it, rent it out, then refinance based on the higher after-repair value to pull some or all of your cash back out for the next deal.

What is cash left in the deal?

Everything you spent (purchase, closing, rehab, holding costs) minus the cash you get back from the refinance after its closing costs. The lower it is, the more of your money you can reuse.

How soon can I refinance a BRRRR property?

It depends on the lender. Fannie Mae conventional cash-out refinances generally require a borrower to have been on title for at least six months, and an existing first mortgage that is paid off must be at least 12 months old. Other lenders, including DSCR lenders, set their own seasoning rules.

Keep reading

• Cash-out refinance on a rental property: how the numbers really work
• Cash-on-cash return on a rental: formula, example and what it leaves out
• How to calculate rental property cash flow, step by step