BRRRR Calculator Formula

Understand the math behind the brrrr calculator. Each variable explained with a worked example.

Use the BRRRR Calculator

Formulas Used

Cash Left in Deal

money_left_in = cash_left_in

Cash Recovered at Refinance

cash_recovered = cash_out

% of Investment Recovered

pct_recovered = total_cash_in > 0 ? cash_out / total_cash_in * 100 : 0

Monthly Cash Flow

monthly_cf = monthly_cash_flow

Cash-on-Cash Return

cash_on_cash = cash_left_in > 0 ? annual_cash_flow / cash_left_in * 100 : 0

New Mortgage Payment

new_mortgage_pmt = mortgage_payment

Variables

VariableDescriptionDefault
purchase_pricePurchase Price(USD)150000
rehab_costRehab Cost(USD)40000
closing_costs_buyPurchase Closing Costs(USD)5000
arvAfter Repair Value(USD)250000
refi_ltvRefinance LTV(%)75
refi_rateRefinance Interest Rate(%)7
refi_term_yearsRefinance Loan Term(years)30
refi_closing_costsRefinance Closing Costs(USD)4000
monthly_rentMonthly Rent(USD)2000
monthly_expensesMonthly Operating Expenses(USD)600
total_cash_inDerived value= purchase_price + rehab_cost + closing_costs_buycalculated
refi_loan_amountDerived value= arv * refi_ltv / 100calculated
cash_outDerived value= refi_loan_amount - refi_closing_costscalculated
cash_left_inDerived value= total_cash_in - cash_outcalculated
rDerived value= refi_rate / 100 / 12calculated
nDerived value= refi_term_years * 12calculated
mortgage_paymentDerived value= r > 0 ? refi_loan_amount * r * pow(1 + r, n) / (pow(1 + r, n) - 1) : refi_loan_amount / ncalculated
monthly_cash_flowDerived value= monthly_rent - monthly_expenses - mortgage_paymentcalculated
annual_cash_flowDerived value= monthly_cash_flow * 12calculated

How It Works

The BRRRR Strategy

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The goal is to recover most or all of your initial investment through refinancing, then repeat with the same capital.

How BRRRR Works

1. Buy a property below market value 2. Rehab to increase value and make rent-ready 3. Rent to a tenant at market rates 4. Refinance based on the new appraised value (ARV) 5. Repeat using the recovered capital

Key Metrics

  • Cash left in deal: Total investment minus cash recovered at refi
  • Cash-on-cash return: Annual cash flow / Cash left in deal
  • Ideal BRRRR: Recover 100% of investment (zero or negative cash left in)

    • Refinance Requirements

  • Most lenders require 6-12 month seasoning period after purchase
  • Typical refi LTV: 70-80% of ARV
  • Property must be stabilized (tenant in place, performing)

    • Worked Example

    Buy at $150,000, rehab $40,000, closing $5,000. ARV $250,000, refi at 75% LTV, 7% rate, 30 years, $4,000 refi closing. Rent $2,000/mo, expenses $600/mo.

    purchase_price = 150000rehab_cost = 40000closing_costs_buy = 5000arv = 250000refi_ltv = 75refi_rate = 7refi_term_years = 30refi_closing_costs = 4000monthly_rent = 2000monthly_expenses = 600
    1. 01Total cash in: $150,000 + $40,000 + $5,000 = $195,000
    2. 02Refi loan: $250,000 x 75% = $187,500
    3. 03Cash recovered: $187,500 - $4,000 = $183,500
    4. 04Cash left in deal: $195,000 - $183,500 = $11,500
    5. 05% recovered: $183,500 / $195,000 = 94.1%
    6. 06Mortgage payment: $187,500 at 7% for 30yr = $1,247.73
    7. 07Monthly cash flow: $2,000 - $600 - $1,247.73 = $152.27
    8. 08Annual cash flow: $152.27 x 12 = $1,827
    9. 09Cash-on-cash return: $1,827 / $11,500 = 15.9%

    Ready to run the numbers?

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