How this BRRRR calculator works
A BRRRR deal is two transactions stapled together. The first is a renovation project funded with your cash and, usually, a short-term loan. The second is a cash-out refinance on the finished property that pays off the short-term loan and returns your cash. The calculator models both and then runs the property as a rental on the new mortgage.
The number in the big box is cash left in the deal: what you put in minus what the refinance gave back. Zero means the property is holding none of your money and every dollar of cash flow is return on nothing. A positive number is the real cost of the rental you now own. A negative number means you pulled out more than you spent.
Below that, the calculator solves backwards: the ARV the appraiser would need to hit, the most you could have paid, and the refinance LTV you would need, each to get all your cash back. Those three numbers are what you take into an offer and a lender conversation.
The BRRRR math, step by step
Using the default deal above:
- Buy. $150,000 purchase with $3,000 in closing costs. A 90% hard money loan of $135,000 at 11% with 2 points ($2,700).
- Rehab. $40,000 of work over a 6-month hold. Interest on the loan runs $7,425 and taxes, insurance and utilities another $2,700.
- Total project cost: $205,825. Subtract the loan and you fronted $70,825 in cash. Purchase plus rehab is 73% of the $260,000 ARV, a little above the 70% rule's $142,000 maximum offer.
- Rent. $2,300 a month. After 5% vacancy and $9,020 of operating expenses, net operating income is $17,200.
- Refinance. 75% of $260,000 is a $195,000 loan. Pay off $135,000 and $5,850 in costs, and $54,150 comes back. Cash left in the deal: $16,675, or 76% recovered.
- Repeat. The new payment is $1,330 a month, $15,963 a year. Cash flow is $1,237 a year on $16,675 left in, a 7% cash on cash return, with $65,000 of equity and a DSCR of 1.08. To get every dollar back, the ARV would need to be $282,921 or the price $134,667.
The formula guide walks through each line and where the numbers come from.
The 70% rule and where it comes from
Flippers use the 70% rule to set a maximum offer: 70% of ARV minus repairs. For BRRRR it works because a 75% refinance on the ARV covers a 70% all-in and leaves 5% of ARV for closing costs, points, interest and holding. Those soft costs usually run 5 to 6% of ARV on a hard money deal, so buying at exactly 70% gets most but not quite all of the cash back. Buy at 80% and you leave roughly 10% of ARV plus the soft costs in the deal.
The rule is a screen. The calculator's "max purchase price" figure is the exact version for your rehab, your loan terms and your holding period. The 70% rule guide covers when to bend it.
Why cash flow after the refinance matters more than the cash out
Getting all your money back is the headline, and it is the part that fails least often. What fails is the rental afterward. A 75% refinance at 7% or more produces a payment that many properties cannot cover from rent, especially ones bought at the top of the 70% rule. Investors end up with their cash back and a property that costs them money every month.
The calculator shows DSCR and cash flow on the new loan for that reason. A DSCR under 1.0 means the rent does not cover the payment, and many refinance lenders will not close the loan at all. Under 1.2, expect a rate adjustment or a lower LTV, which means less cash out. The refinance guide covers what lenders look for.
What goes wrong
The appraisal comes in under the ARV. The rehab runs over. The hold stretches from six months to ten and the interest keeps accruing. The lender's LTV drops from 75% to 70% because the DSCR is thin. Each one leaves more cash in the deal. Together they turn a full-recovery projection into a normal rental purchase with hard money fees on top. Model the deal at an ARV 5% below your estimate and a rehab 15% above before you offer. The risks guide goes through each failure and how to price it.