How much cash stays in the deal after the refinance, and does it still cash flow?
Find out how much cash a BRRRR deal leaves tied up after the refinance, and whether the rent still cash flows on the new loan. Enter the buy, rehab, refinance and rent numbers and the BRRRR calculator works out the rest as you type.
Loading the calculator… (it needs JavaScript turned on)
How to use the BRRRR calculator
- Buy and rehab. Enter the purchase price, closing costs and rehab budget, how many months until you refinance, and what the property costs you each month while you work on it (taxes, insurance, utilities and loan interest). If a hard money or private lender funds the purchase and rehab, enter the loan amount and its points; leave it at 0 for a cash purchase.
- Refinance. Enter the after repair value (ARV) you expect the appraisal to support, the lender's loan-to-value (often 70–75% for a cash-out refinance), the rate, the term and the refinance closing costs.
- Rent. Enter the rent and the operating costs, the same way as in the rental property calculator.
How the BRRRR numbers work
- All-in cost = purchase price + buying closing costs + rehab + holding costs + loan points.
- Refinance loan = ARV × loan-to-value.
- Cash back at refinance = refinance loan − refinance closing costs − payoff of the purchase/rehab loan.
- Cash left in the deal = the cash you put in before the refinance − the cash you get back. If it is zero or negative, you recovered all of your money and the cash-on-cash return is effectively infinite.
- Monthly cash flow is measured on the new, larger mortgage, because that is the loan you will live with.
Worked example
The calculator opens with a $150,000 purchase, $4,500 closing costs, a $40,000 rehab and six months of holding at $1,200 a month, all paid in cash. All-in cost: $201,700.
- The house appraises at $260,000. A 75% cash-out refinance gives a $195,000 loan; after $5,000 refinance closing costs, $190,000 comes back to you.
- Cash left in the deal: $201,700 − $190,000 = $11,700.
- At $2,300 rent, the new $1,330 mortgage payment and $705 of monthly operating costs, the property cash flows about $150 a month, a 15.4% return on the $11,700 still invested, with $65,000 of equity.
The all-in cost is 77.6% of ARV, a little over the common 75% target, which is why some cash stays in the deal. Bring the all-in cost down by about $11,700, with a lower price or a tighter rehab, and the refinance returns all of your money. Reaching 75% of ARV alone is not quite enough, because the refinance closing costs also come out of the new loan.
The 75% rule of thumb
Because most cash-out refinances lend about 75% of the appraised value, BRRRR investors aim to keep the all-in cost at or under 75% of ARV. Above that, cash stays in the deal; below it, you can pull out more than you put in. The calculator flags which side of the line your deal is on.
Read the full guide to BRRRR real estate and how to analyze a BRRRR deal. Prefer a spreadsheet? Get the free BRRRR spreadsheet.
Frequently asked questions
How long do I have to wait before refinancing?
Many lenders require you to own the property for 6–12 months before they will lend on the new appraised value (a "seasoning" period). Some DSCR and portfolio lenders allow less. Check with your lender before you buy, and set the months field to match.
What loan-to-value should I use?
For a cash-out refinance on an investment property, 70–75% is common. Using 70% in the calculator is a conservative test of whether the deal still works.
What if the appraisal comes in low?
Then the refinance loan is smaller and more cash stays in the deal. Lower the ARV field to see your worst case before you buy; if the deal only works at the highest ARV, it is a risky deal.
Does cash flow have to be positive after the refinance?
It should be. Pulling all your cash out is only a win if the rent still covers the bigger mortgage and the real operating costs.
