UtilibyWritten by the Utiliby editorial team · Last updated October 12, 2026 · Rules and formulas reviewed October 2026
What is the BRRRR method?
BRRRR is a real estate investing strategy built around five steps: Buy, Rehab, Rent, Refinance, Repeat. The investor buys a distressed or under-priced property, renovates it, places a tenant, refinances into a long-term mortgage based on the improved value and repeats with the money that comes out of the refinance. When it works, the investor ends up owning a cash-flowing rental with little or none of their own money left in it.
The weak point is that every number is an estimate: what the property will be worth after the work, what the work will cost, how long it will take, what the property will rent for and what the lender will allow. A BRRRR calculator turns those estimates into a clear answer before you make an offer. This free online BRRRR calculator shows how much cash you invest, how much comes back, what stays in the deal, your monthly cash flow, DSCR and equity, then stress-tests the deal with what-if tables and a ten-year projection.
How to use this BRRRR calculator
- Enter the purchase and rehab. Include the price, the full rehab budget, your best estimate of ARV and the closing costs.
- Choose the financing. For cash, leave hard money off. For a hard money loan, enter the percentage of purchase and rehab it funds, the rate and the points.
- Set the refinance. Enter the loan-to-value, rate, term and costs your lender quotes.
- Enter rent and expenses. Use realistic vacancy, management, maintenance and capital expense percentages even if you plan to self-manage.
- Read the verdict. The checklist shows whether the deal meets the common tests. The what-if tab shows how it holds up if the appraisal, rehab or rent differ.
The BRRRR math, step by step
| Step | Formula |
|---|---|
| All-in cost | Purchase + rehab + buying closing costs + holding costs + loan interest + points |
| Cash invested | All-in cost minus the purchase and rehab loan |
| New loan | ARV × refinance LTV |
| Cash out | New loan − payoff of the old loan − refinance costs |
| Cash left in deal | Cash invested − cash out |
| Net operating income | Rent after vacancy − operating expenses (not loan payments) |
| Cash flow | NOI − yearly loan payments |
| DSCR | NOI ÷ yearly loan payments |
Worked example. Buy at 120,000, rehab 35,000, ARV 230,000 and a hard money loan on 85% of the price and all of the rehab. After interest, points, closing and holding costs the all-in figure is about 171,000. The loan is 137,000, so cash invested is about 34,000. A 75% refinance gives a 172,500 loan. After paying off the hard money loan and refinance costs, about 31,000 comes back, which leaves roughly 3,000 in the deal and monthly cash flow near break-even. Move the numbers to see what small changes do.
Rules of thumb: 75% of ARV, the 1% rule and DSCR
- 75% of ARV. All-in cost at or below about 75% of ARV lets a 75% refinance return nearly all of your cash.
- 1% rule. Monthly rent of about 1% of ARV is a quick screen for cash flow. In high-priced markets few deals pass, so treat it as a screen, not a law.
- DSCR 1.2 or more. Many investor loans require income to cover the payment by at least 20%.
- Cash flow above zero. After vacancy, management, maintenance and capital expenses, not before.
These are filters, not guarantees. A deal that fails one test can still be sound if it passes the others and you understand why.
Where BRRRR deals go wrong
- Low appraisal. If the appraisal is 10% under your ARV, the refinance may return thousands less than planned.
- Rehab overruns and delays. Every extra month of holding adds interest and carrying cost.
- Seasoning rules. Some lenders limit cash-out refinances for a period after purchase.
- Rate changes. A higher rate shrinks cash flow and DSCR; test rates in the what-if tab.
- Rent that does not match the plan. Verify rents with listings and a property manager.
- Ignoring reserves. Keep cash for vacancy and repairs.
Financing a BRRRR: cash, hard money and DSCR loans
Investors fund the purchase and rehab with cash, a hard money loan, private money or a line of credit. Hard money is short-term and costs more: interest rates in the low double digits and points are common. The refinance is usually a long-term loan from a bank or a DSCR lender, which qualifies the loan mostly on the property's rent rather than the borrower's personal income. DSCR loans commonly have higher rates than conventional mortgages and allow cash-out up to a stated LTV. Terms vary widely between lenders and over time, so always use quotes.
The 10-year projection and what it assumes
The projection tab shows what happens after the refinance. Rent grows by your rent growth rate, expenses by your expense growth rate and the property by your appreciation rate. The loan amortises on its fixed schedule. For each year the table lists NOI, cash flow, cumulative cash flow, loan balance, value and equity, and the IRR on the cash left in the deal if you sell in year 10 with 6% selling costs. If no cash is left in the deal, IRR is not defined, and the tool says so rather than inventing a number.
BRRRR compared with flipping and buy-and-hold
| BRRRR | Flip | Buy and hold | |
|---|---|---|---|
| Goal | Recover capital, keep the rental | Sell for profit | Long-term income and growth |
| Cash needed | Short term, mostly returned | Until sale | Permanent down payment |
| Income | Monthly after refinance | None, one profit | Monthly |
| Main risk | Appraisal, rehab, rates | Market, timeline | Vacancy, repairs |
Tips for a safer BRRRR analysis
- Use conservative ARV and rent numbers and run the lower cases.
- Add 10 to 20% to the rehab budget as a contingency.
- Include realistic holding costs and a slow refinance timeline.
- Quote the refinance with a real lender before you buy.
- Keep reserves after the refinance.
- Compare this deal with simply buying a turnkey rental. If BRRRR does not beat it after risk, skip it.
Common BRRRR calculator mistakes
- Using the ARV from an optimistic listing instead of sold comparables.
- Forgetting interest and points on the short-term loan.
- Leaving out management and capital expenses because you plan to self-manage.
- Refinancing at a higher LTV than the lender allows.
- Ignoring the cost of the refinance itself.
Privacy
The calculator runs in your browser. The figures you enter are not sent to a server and are not stored. Reloading the page returns the example deal. Files you download are created on your device.
Related free tools
Use these free online tools together with this one:
- Test a purchase and resale with the house flip calculator.
- Check a long-term rental with the rental property cash flow calculator.
- Compare rents with property prices with the rental yield calculator.
- Plan the rehab schedule with the Gantt chart maker.
- Work out loan payments with the loan calculator.
- Count the working days in a renovation with the working days calculator.
Frequently asked questions
What is the BRRRR method?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. An investor buys a property below market value, renovates it, rents it out, refinances into a long-term loan based on the new higher value and uses the cash from the refinance to buy the next property.
How does a BRRRR calculator work?
It adds up everything you spend on the purchase, rehab, closing, holding costs and interest, works out the new loan from the after-repair value, subtracts the old loan and costs to find the cash you take out, and shows the cash left in the deal plus the monthly cash flow after the refinance.
What does cash left in the deal mean?
It is the money you have invested that the refinance did not return. If you put in 40,000 and the refinance returns 35,000, you have 5,000 left in the deal. If the refinance returns more than you put in, you have a full BRRRR and nothing is left.
What is a good BRRRR deal?
Investors usually want all-in costs of about 75% of ARV or less, positive monthly cash flow after the refinance, a DSCR of at least 1.2 and as little cash left in the deal as possible. The checklist in the results shows each test for your numbers.
What is the 75% rule in BRRRR?
It is a guideline that the purchase price plus rehab and other costs should be no more than about 75% of the after-repair value. With a lender that refinances at 75% of value, that is what lets you take back all of your money.
What is ARV and how do I estimate it?
ARV is the after-repair value, what the property should be worth once the work is finished. Estimate it from recent sales of similar renovated homes nearby, and then test lower values in the what-if tables because the refinance appraisal may come in lower.
What loan-to-value can I refinance at?
Many lenders allow up to 75% of value on a rental refinance, some less and some more. DSCR lenders and banks have different limits, so use the LTV your lender actually quotes.
What is DSCR and why does it matter in BRRRR?
DSCR is the debt service coverage ratio: net operating income divided by the yearly loan payments. A DSCR of 1.0 means rent exactly covers the loan. Many DSCR lenders want 1.2 or more, so the refinance may be limited by income rather than by value.
Why is my cash flow negative after the refinance?
A high refinance loan, a high rate or too little rent makes the payment larger than the net operating income. Lower the refinance LTV, raise the rent, cut costs or find a cheaper deal. The what-if tables show the effect of rate and rent.
Does the calculator include a hard money loan?
Yes. Choose hard money and enter the loan as a percentage of the purchase and rehab, the interest rate and the points. It assumes interest-only payments on the full loan for the number of months until the refinance.
How long should I hold before the refinance?
Lenders often require a period of ownership called seasoning, commonly six to twelve months for a cash-out refinance, although some lenders offer shorter periods. Enter the months you expect and compare how longer holds raise holding costs.
What closing costs are included?
You enter buying closing costs as a percentage of the price and refinance costs as a percentage of the new loan. Add any fixed fees to the holding costs or rehab budget if your lender charges them.
Are taxes and depreciation included?
No. The calculator shows pre-tax cash flow. Depreciation, tax on rental income and any tax on a later sale depend on your situation, so ask an accountant.
What is cash-on-cash return in a BRRRR?
It is yearly cash flow divided by the cash left in the deal. When no cash is left, the return is mathematically infinite and the calculator shows Infinite rather than a number.
What is the difference between BRRRR and flipping?
A flip sells the renovated home for a profit. BRRRR keeps the home as a rental and uses the refinance to recover capital, so the profit shows up as monthly cash flow and long-term equity.
Can I use the calculator for multifamily or small apartment buildings?
Yes for small multifamily if you enter the total rent and total expenses. Large commercial deals use different loans and valuation methods based on net operating income and cap rates.
How accurate is the 10-year projection?
It is a simple model: rent and expenses grow at the percentages you choose, the loan amortises on schedule and the value grows at your appreciation rate. Real results will differ.
What if the refinance appraisal comes in low?
Use the ARV column in the what-if table to see the effect. A 5 to 10% lower appraisal often leaves thousands of dollars in the deal, which is why a margin of safety matters.
Is my data private?
Yes. The calculator runs in your browser. Nothing you enter is sent to a server or saved.
Is this BRRRR calculator free?
Yes. It is free to use online with no account, trial or limit on the number of deals.
Sources and further reading
- U.S. Department of Housing and Urban Development (HUD) and consumer-finance guidance on loan-to-value ratios and cash-out refinancing.
- Consumer Financial Protection Bureau: explanations of mortgage refinancing and closing costs.
- Standard real estate investment analysis texts on net operating income, cap rate, cash-on-cash return and debt service coverage ratio.
- Lender published guidelines for DSCR investor loans (terms vary by lender; always obtain current quotes).
Sources were consulted in October 2026. Standards and rules can change, so always check the official page for your situation.