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BRRRR calculator
Enter what the property costs to buy and fix, what it should appraise for afterwards and the refinance terms to see how much of your cash comes back, how much stays in the deal, and whether the rent covers the new loan.
Cash left in the deal
$17,000
Cash-on-cash return 15.36% on the cash left. Cash flow after the refinance: $218 a month.
Some of your cash stays in the deal
- All-in cost
- $200,000
- Your cash in
- $200,000
- New loan (75% of value)
- $187,500
- Refinance closing costs
- − $4,500
- Cash back (91.5% of cash in)
- $183,000
- Cash left in the deal
- $17,000
- Value needed to get all cash back
- $272,667
- Equity after the refinance
- $62,500
- Net operating income, a year
- $17,580
- New mortgage ($1,247.44 a month)
- − $14,969
- Cash flow, a year
- $2,611
- DSCR on the new loan
- 1.17
How it is calculated
Cash left in the deal = Your cash in − (New loan − refinance closing costs − purchase loan payoff)
- Your cash in
- Purchase price, purchase closing costs, rehab and holding costs, less anything you borrowed to buy or rehab.
- Holding costs
- Everything paid between buying and refinancing: interest and fees on a purchase loan, property tax, insurance and utilities. Rent collected before the refinance can be taken off.
- New loan
- After-repair value × the loan-to-value the refinance lender allows. The lender uses its own appraisal, not your estimate.
- Purchase loan payoff
- A hard-money or other short-term loan is repaid from the new loan before any cash reaches you. The calculator treats it as interest-only, so the payoff equals the amount borrowed.
- Cash-on-cash return
- Yearly cash flow after the new mortgage, divided by the cash left in the deal. If no cash is left, there is nothing to divide by and no percentage is shown.
Worked example
- A house is bought for $150,000 in cash, with $4,500 in closing costs, $40,000 of rehab and $5,500 of holding costs. The all-in cost, and the cash in, is $200,000.
- The finished house appraises for $250,000. A lender offering 75% of value lends $187,500. After $4,500 in refinance closing costs, $183,000 comes back: 91.5% of the cash in.
- $200,000 − $183,000 = $17,000 left in the deal. The owner keeps $62,500 of equity. To get every dollar back at 75%, the appraisal would need to reach $272,667.
- Rent is $2,200 a month. After 5% vacancy and $7,500 of yearly operating expenses, net operating income is $17,580.
- The new loan at 7% over 30 years costs $1,247.44 a month, $14,969 a year. That leaves $2,611 a year: a 15.36% cash-on-cash return on the $17,000, with a DSCR of 1.17.
What moves the result
The appraisal decides most of it. In the example, each $10,000 the appraisal falls short leaves another $7,500 in the deal. Base the after-repair value on recent sales of similar finished homes nearby, and see what happens if it comes in lower.
Getting all the cash back is not the same as a good rental. A bigger loan returns more cash and also raises the payment. In the example, an appraisal of $280,000 returns all the cash and $5,500 more, but yearly cash flow falls from $2,611 to $814 and DSCR to 1.05. Many lenders set a minimum DSCR for rental loans, so check the new payment against the rent.
Rehab that runs over in cost or time adds to cash in twice: the extra work, and the extra months of holding costs. Short-term purchase loans commonly charge higher rates and fees than long-term mortgages, which makes delays expensive.
Lenders set their own loan-to-value limits and waiting periods for cash-out refinances, and these are commonly stricter for rentals than for a home you live in. Ask the refinance lender for its terms before you buy. This calculator works before income tax. The results are estimates, not advice.
Common questions
What does BRRRR stand for?
Buy, rehab, rent, refinance, repeat. An investor buys a property that needs work, improves it, lets it to a tenant, then refinances against the higher value to take cash back out and use it on the next property.
How long do I have to wait before a cash-out refinance?
It depends on the lender. For loans Fannie Mae buys, its Selling Guide (B2-1.3-03) says at least one borrower must have been on title for at least six months, and a first mortgage being paid off must be at least 12 months old. Other lenders, such as those offering DSCR loans, set their own waiting periods, which can be shorter.
Can I refinance sooner if I paid cash?
Sometimes. Fannie Mae’s Selling Guide has a delayed financing exception for a property bought within the past six months with no mortgage financing. The new loan is limited to the documented amount of your initial investment in purchasing the property, plus closing costs, prepaid fees and points, and still to the usual loan-to-value limit. Other conditions apply, so ask the lender.
What if the refinance does not return all my cash?
Then some stays in the deal, as in the example, and the calculator shows the return on that amount. Leaving cash in is common. Whether it suits you depends on the cash flow and on what else you would do with the money.
Why is no cash-on-cash return shown when all my cash comes back?
Cash-on-cash return divides yearly cash flow by the cash you have in the deal. With nothing left in, there is no meaningful percentage. Look at the cash flow and DSCR instead: the property still has to cover a larger loan.