BRRRR Calculator

This calculator follows a BRRRR deal from purchase through refinance. It totals what you put in (purchase, rehab, holding and closing costs), sizes the new mortgage from the after-repair value and the lender's loan-to-value limit, and shows how much cash comes back out, how much stays in, the new monthly payment, annual cash flow, cash-on-cash return on the money left in, and the equity created.

It treats everything invested as your own cash, as if you bought with cash or a short-term loan that the refinance pays off in full. Refinance closing costs are not deducted separately — add them to holding and closing costs. Operating expenses should cover property tax, insurance, maintenance, vacancy, capital reserves and management; leaving any out makes cash flow look better than it will be.

The method only works if the appraisal supports your ARV and the rent covers the larger loan. If you would rather sell after the rehab, compare the same numbers in the fix and flip calculator.

The BRRRR acronym comes from the US rental-investing community; the payment line is the standard fixed-rate amortization formula. When the new loan exceeds what you invested, the calculator caps cash returned at the amount invested and shows cash-on-cash as infinite. In practice any surplus loan proceeds would also come to you, less refinance costs.

Two lender rules decide how much cash you get back:

• Maximum LTV: conventional cash-out refinances on investment properties are commonly capped around 70–75% of appraised value, and DSCR or portfolio lenders set their own limits. Use the figure from your lender's term sheet, not the best case.
• Seasoning: many lenders will only use the new appraised value after you have owned the property for a set period, often around six months; before that they may lend against your purchase price plus documented rehab. Ask about seasoning before you buy, because it determines how long your cash is tied up.

Lenders also check that rent covers the new payment. The DSCR calculator shows whether the deal meets a typical 1.20–1.25 coverage ratio.

• Cash left in near zero with positive cash flow: the ideal BRRRR. You can repeat with the same capital.
• Cash left in, positive cash flow: still a good rental; judge it on cash-on-cash return against your alternatives, and compare with the cash-on-cash return calculator for a standard purchase.
• Little cash left in, negative cash flow: you have recycled capital but will pay each month to hold the property. Higher rent, lower expenses or a smaller loan (lower LTV) fix this at the cost of more cash left in.
• Large equity created but large cash left in: the appraisal or LTV is the bottleneck. A lender with a higher LTV or a different appraisal may help, but do not plan on it.

Cash flow is the line most often overstated. Build monthly operating expenses from these parts rather than a single guess:

• Property tax and landlord insurance: from the actual bills, divided by 12.
• Vacancy: a share of rent for months empty between tenants.
• Repairs and maintenance, plus a capital expenditure reserve for roofs, HVAC and appliances.
• Property management: often a percentage of collected rent, even if you self-manage, so the deal still works if you hire it out.
• HOA dues and any landlord-paid utilities.

Net operating income before the mortgage is what lenders and appraisers look at; the NOI calculator builds it line by line.