🔁 BRRRR Calculator
BRRRR recycles your capital: buy distressed, rehab, rent, refinance, repeat. See your cash left in and true return.
How the BRRRR Strategy Works
Buy, Rehab, Rent, Refinance, Repeat. You buy below market, force appreciation with renovations, then refinance at the new appraised value — pulling most of your cash back out to repeat the cycle. Done well, you end up with a cash-flowing rental and almost none of your own money left in it.
The Key Formulas
Refi Loan = ARV × LTV (typically 75%)
Cash Left In = Total Invested − Refi Loan
The magic metric is cash left in: the smaller it is, the higher your cash-on-cash return. If the refinance returns all your cash, your return is mathematically infinite — you collect cash flow on $0 invested. Lenders usually require 6–12 months of "seasoning" (ownership) before refinancing at appraised value.
Worked Example
Buy $150,000 + rehab $40,000 = $190,000 invested. ARV $250,000 → 75% refi loan = $187,500. Cash left in = just $2,500. At 7% the new P&I is ~$1,247/mo; with $2,100 rent and $600 other costs, cash flow ≈ $253/mo ($3,031/yr) — a 121% cash-on-cash return on the $2,500 remaining. Repeat with the recycled $187,500.
Where BRRRR Deals Die
Three failure points dominate. First, the appraisal: your refinance is capped at 70–80% of appraised value, not your renovation budget — if the appraisal comes in light, your capital stays trapped. Conservative investors underwrite the refi at 75% of a pessimistic ARV. Second, seasoning: most lenders require 6–12 months of ownership before refinancing on the new value; hard-money loans bridge the gap but cost 9–12% plus 2–4 points. Third, rehab overruns: budget a 15–20% contingency and verify contractor bids against the ARV math — every $10,000 over budget at 75% LTV traps $2,500 extra (plus the unrecovered 25%). The BRRRR promise of "infinite returns" is real when all capital is recovered, but the first deal's trapped equity is tuition — keep reserves for it.
Frequently Asked Questions (FAQs)
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat — a strategy popularized by BiggerPockets for building a rental portfolio by recycling the same capital through multiple properties.
What is the 70% rule in BRRRR?
A buying guideline: pay no more than 70% of ARV minus rehab costs. It builds in margin so the refinance can return most of your cash. On a $250k ARV with $40k rehab, max price ≈ $135k.
How long before I can refinance (seasoning)?
Most conventional lenders require 6 months of ownership before using the new appraised value; some allow 12 months. Delayed-financing exceptions exist for all-cash purchases.
What are the risks of BRRRR?
Rehab overruns, ARV coming in low, rising rates shrinking refi proceeds, and extended vacancies during renovation. Always underwrite the deal as a mediocre flip first — the refinance is the bonus, not the plan.
Can I BRRRR with little money?
You still need purchase + rehab capital upfront (cash, hard money, or partners). The strategy recycles capital — it does not eliminate the need for it on deal one.
Last updated: September 2026
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Last updated: September 2026