BRRRR Calculator
Calculate your potential returns, cash flow, and cash left in the deal using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) real estate investing strategy.
Property Details
Buy & Rehab
Refinance (The "ARV")
Rent & Monthly Cash Flow
BRRRR Analysis
Cash Left In Deal
Perfect BRRRR! You've pulled all your initial capital out of the property to reinvest, effectively acquiring this property for $0 out of pocket.
What is the BRRRR Method in Real Estate?
The BRRRR method stands for Buy, Rehab, Rent, Refinance, Repeat. It's a popular real estate investment strategy designed to help investors build passive income and equity simultaneously by recycling their initial capital.
By purchasing distressed properties under market value, forcing appreciation through renovations (rehab), renting it out to generate cash flow, and then doing a cash-out refinance at the new higher After Repair Value (ARV), an investor can often pull out their entire initial investment. This capital can then be used to repeat the process on the next property.
How to Use the BRRRR Calculator
To properly use this tool, you'll need the estimated financial figures for your potential deal. Plug these numbers into the configuration panel:
- Purchase Price & Rehab Costs: What you are paying for the house and how much you estimate repairs will cost.
- Closing Costs: Standard fees associated with buying the property (title, origination, taxes).
- After Repair Value (ARV): The estimated market value of the property after your renovations are complete based on comparable sales (comps).
- Refinance LTV (Loan-To-Value): The maximum percentage of the ARV the bank will lend you (typically 70-80% for investment properties).
- Rent & Expenses: Expected gross monthly rental income and all operating expenses (taxes, insurance, property management, CapEx reserves, vacancy).
How It Works: Understanding the Numbers
The ultimate goal of a perfect BRRRR is to have $0 left in the deal. The calculator works by summing up your total "All-In" costs (Purchase + Rehab + Closing). It then calculates the maximum new loan amount based on the ARV and LTV percentage.
If the new loan amount is greater than your All-In costs, you pull all your money out, scoring an infinite Cash-on-Cash Return. The calculator also computes your new monthly mortgage (Principal & Interest) based on the refinance terms to project your expected monthly cash flow.
Real-Life Use Cases
- Evaluating Deal Viability: A real estate investor looking at a foreclosure uses this to determine if the numbers "pencil out" before making an offer to a wholesaler.
- Partnership Pitches: A "deal finder" prints out these calculations to show a private money lender or partner the projected returns and timeline for capital recovery.
- Portfolio Scaling: An investor runs multiple scenarios adjusting the rehab budget to see how it affects their ability to pull capital out for their next acquisition.
Frequently Asked Questions (FAQ)
What does a "perfect BRRRR" mean?
A "perfect BRRRR" means that when you refinance the property, the new loan amount completely covers your purchase price, rehab costs, and closing costs. You leave exactly $0 of your own money "trapped" in the property while still cash flowing positively every month.
Does the calculator require an account to save my deals?
No, this calculator processes everything locally in your browser. If you want to save a specific deal's numbers, simply use your browser's "Print to PDF" feature to save a copy of the page.
Are there taxes on the cash-out refinance?
Generally, no. Under current US tax law, pulling equity out of a property via a loan/refinance is not considered a taxable event or capital gain because it is borrowed money that must be repaid. However, always consult a CPA regarding your specific tax situation.
The tools and calculators provided on The Simple Toolbox are intended for educational and informational purposes only. They do not constitute financial, legal, tax, or professional advice. While we strive to keep calculations accurate, numbers are based on user inputs and standard assumptions that may not apply to your specific situation. Always consult with a certified professional (such as a CPA, financial advisor, or attorney) before making significant financial or business decisions.
Free Tools Alert
Join 10,000+ creators. Get our newest productivity tools, templates, and calculators directly to your inbox every month.
No spam. One-click unsubscribe.