BRRRR Calculator

Frequently asked questions

• What does BRRRR stand for?

  Buy, Rehab, Rent, Refinance, Repeat. The strategy is to acquire a distressed property below market value, force appreciation through targeted renovation, lease it up to a stable tenant, then refinance into a long-term loan based on the new appraised value (ARV). If the refinance proceeds equal or exceed your total cash invested, you've recycled your capital and can deploy it into the next deal.
• What LTV do lenders allow on a BRRRR refinance?

  Conventional cash-out refinances on investment properties typically cap at 75% LTV (sometimes 70%). DSCR lenders may go to 75–80% LTV with relaxed personal-income underwriting in exchange for a higher rate. The lower of (lender LTV cap × ARV) and (lender DSCR floor at your projected rent) is the binding constraint.
• What's a successful BRRRR vs. a failed BRRRR?

  A successful BRRRR meets two tests, not one. First, the refinance proceeds cover all of your cash invested (down payment, closing, rehab, holding costs, hard-money interest) — that's capital recycling. Second, the property still cash flows positively at the new long-term mortgage payment. A deal that recycles capital but bleeds $200/month post-refi is not a success — you've created a liability that needs feeding.
• Should I use hard money or my own cash for the acquisition?

  Hard money preserves your liquidity for the next deal and forces discipline (interest clock is ticking). Trade-offs: rates run 10–13% interest-only, points 2–4 upfront, terms 6–12 months. Cash avoids the carry cost but ties up capital that could be working elsewhere. The decision usually comes down to deal flow — if you have a steady pipeline, hard money compounds your capital faster.
• Why does the post-refi cash flow matter so much?

  Because long-term mortgage payments are meaningfully larger than the interest-only payments during the rehab phase. A property that cash-flowed in your underwriting at a 4% conventional rate may not cash flow at today's 7%+ DSCR rates. Always stress-test the post-refi cash flow at the rate you'll realistically get when you actually refinance, not the rate you remember from 2021.
• How conservative should my ARV estimate be?

  Pull at least 3 comparable sales within 0.5 miles, sold within the last 6 months, with similar bed/bath/sqft and similar finish level to your post-rehab product. Take the median, then knock 5–10% off as your appraisal margin. Lenders order appraisals from the lower end of the range, and a low appraisal can collapse the whole deal.