BRRRR Calculator
Calculate BRRRR (Buy, Rehab, Rent, Refinance, Repeat) real estate deals. Find cash left in deal, infinite returns, and monthly cash flow.
Buy - Purchase & Initial Financing
Rehab - Renovation Costs
Rent - Income & Expenses
Refinance - Long-Term Financing
Repeat - Use recovered capital for next deal
Total Cash Invested
$85,300
Refinance Analysis
Net Cash Flow
$151
Key Investment Metrics
Value Creation (Forced Appreciation)
BRRRR Timeline
BRRRR Deal Analysis
Good BRRRR deal. You recover 72% of your capital and still cash flow.
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About This Calculator
The BRRRR Calculator analyzes the Buy, Rehab, Rent, Refinance, Repeat strategy—the powerful method for building a rental portfolio using recycled capital. With cash-out refinance rates at 7.0-7.75% and LTV limits of 70-75% in late 2025 (Coastal Equity Group), BRRRR requires sharper underwriting than ever before. This calculator computes your maximum allowable offer, capital recovery percentage, post-refinance cash flow, and true return on capital left in the deal. The "perfect BRRRR" (100% capital recovery) is increasingly rare in 2026—most investors now leave 5-10% of capital in each property. Enter your purchase price, rehab costs, ARV, rental income, and refinance terms to determine if your deal delivers the returns needed to scale your portfolio.
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How to Use the BRRRR Calculator
- 1Enter the purchase price of the distressed property (what you'll pay, not asking price).
- 2Input estimated renovation costs including materials, labor, permits, and a 15-20% contingency.
- 3Set the After-Repair Value (ARV)—use conservative estimates based on recent comparable sales within 0.5 miles.
- 4Add holding costs: hard money interest, taxes, insurance, utilities during renovation (typically 4-6 months).
- 5Enter expected monthly gross rent and operating expenses (taxes, insurance, management, maintenance, vacancy).
- 6Set refinance terms: LTV (typically 70-75% for investment properties in 2026), interest rate (7-8%), and loan term.
- 7Review capital recovery percentage, monthly cash flow, cash-on-cash return, and DSCR to evaluate if the deal meets your criteria.
2025-2026 BRRRR Market Reality
BRRRR remains viable but requires adaptation to current market conditions (BiggerPockets):
Current Financing Environment:
| Metric | 2021-2022 | 2025-2026 |
|---|---|---|
| Cash-Out Refi Rate | 3.5-4.5% | 7.0-7.75% |
| Typical LTV | 75-80% | 70-75% |
| Seasoning Period | 3-6 months | 6-12 months |
| 100% Capital Recovery | Common | Rare |
| Capital Left in Deal | 0-5% | 5-15% |
What This Means for BRRRR Investors:
- Monthly payments on refinanced properties are 40%+ higher than 2021
- Tighter LTV means less cash out at refinance
- Longer seasoning ties up capital for longer periods
- Cash flow margins are thinner—underwrite conservatively
The "New Normal" BRRRR: Instead of "infinite returns" (100% capital recovery), successful 2026 BRRRR investors target:
- 80-95% capital recovery (leave 5-20% in the deal)
- 8-12% cash-on-cash return on capital left invested
- Positive cash flow from month one after refinance
- DSCR of 1.2+ to ensure the property covers its debt
Market Opportunity: Higher rates mean fewer competing buyers. This creates better acquisition opportunities—properties that sold in hours during 2021 now sit for weeks. Negotiate harder, buy deeper, and the math works even at 7%+ rates.
The BRRRR Maximum Allowable Offer Formula
Work backwards from your target capital recovery to determine your maximum purchase price:
Step 1: Calculate Target Cash-Out Amount
Cash-Out Amount = ARV × LTV%
Step 2: Determine Total All-In Budget
All-In Budget = Cash-Out Amount (for 100% recovery)
Step 3: Calculate Maximum Purchase Price
Max Purchase = All-In Budget - Rehab - Holding Costs - Closing Costs
Example (2026 Market):
| Input | Value |
|---|---|
| ARV | $250,000 |
| Refinance LTV | 75% |
| Target Cash-Out | $187,500 |
| Rehab Budget | $45,000 |
| Holding Costs (5 months) | $10,000 |
| Closing Costs (both transactions) | $8,000 |
| Maximum Purchase | $124,500 |
Sensitivity Analysis—What If ARV Is Off?
| Actual ARV | Cash-Out (75%) | Capital Recovered | Capital Left |
|---|---|---|---|
| $250,000 (expected) | $187,500 | $187,500 | $0 |
| $230,000 (-8%) | $172,500 | $172,500 | $15,000 |
| $210,000 (-16%) | $157,500 | $157,500 | $30,000 |
A 16% ARV miss leaves $30,000 stuck in the deal—always underwrite conservatively.
Cash-Out Refinance Options and Seasoning Requirements
Understanding your refinance options is critical for BRRRR execution:
Refinance Product Comparison (2025-2026):
| Loan Type | Rate | LTV | Seasoning | Min DSCR | Best For |
|---|---|---|---|---|---|
| Conventional (Fannie/Freddie) | 7.0-7.5% | 75% | 6-12 months | 1.0 | Best rates, longest seasoning |
| DSCR Loan | 7.5-8.5% | 70-75% | 0-6 months | 1.2+ | No income verification |
| Bank Portfolio | 7.0-8.0% | 70-80% | Varies | 1.2 | Relationship-based |
| Credit Union | 6.75-7.5% | 75-80% | 6+ months | 1.1 | Members with history |
| Hard Money Refi | 9-12% | 65-70% | None | N/A | Bridge to better loan |
Seasoning Period Strategies:
- No seasoning needed? Use DSCR lenders—they base loans on property cash flow, not ownership duration
- 6-month seasoning? Plan your rehab + rent-up to take 5-6 months total
- 12-month seasoning? Either hold longer or use delayed financing exception (refinance within 6 months up to purchase price + documented rehab)
Delayed Financing Exception (Fannie Mae): If you paid cash, you can refinance within 6 months at up to:
- Original purchase price + documented renovation costs
- OR 75% of current appraised value
- Whichever is LOWER
This is NOT a full cash-out refi—you're limited to your documented costs.
BRRRR Cash Flow Analysis
Post-refinance cash flow determines long-term BRRRR success:
Cash Flow Formula:
Monthly Cash Flow = Gross Rent - PITI - Operating Expenses
Where:
PITI = Principal + Interest + Taxes + Insurance
Operating Expenses = Management + Maintenance + Vacancy + CapEx + Utilities (if any)
Example Cash Flow Analysis:
| Line Item | Monthly |
|---|---|
| Gross Rent | $1,500 |
| Vacancy (8%) | -$120 |
| Effective Rent | $1,380 |
| Mortgage (P&I on $187.5K @ 7.5%, 30yr) | -$1,311 |
| Property Tax | -$200 |
| Insurance | -$100 |
| NOI After Debt | -$231 |
| Management (8%) | -$110 |
| Maintenance (5%) | -$69 |
| CapEx Reserve (5%) | -$69 |
| Net Cash Flow | -$479 |
This deal doesn't cash flow at current rates!
What Needs to Change:
| Scenario | Monthly Cash Flow |
|---|---|
| Current (7.5% rate) | -$479 |
| Refinance at 6% | +$150 |
| Rent increases to $1,700 | +$20 |
| Lower purchase (more equity) | Varies |
The 2026 BRRRR Reality: Many BRRRR deals that worked at 4% rates don't cash flow at 7%+. Solutions:
- Buy deeper (more equity = smaller loan = lower payment)
- Target higher rent-to-value markets (Midwest, South)
- Accept negative cash flow if appreciation potential is strong
- Wait to refinance until rates drop
Top Markets for BRRRR Investing (2025-2026)
Market selection dramatically impacts BRRRR success. These markets combine affordable prices, strong rents, and investor-friendly conditions:
Top BRRRR Markets:
| Market | Avg. Price | Avg. Rent | Rent/Price | Notes |
|---|---|---|---|---|
| Cleveland, OH | $80,000 | $1,000 | 1.25% | Strong rent ratio, appreciation lagging |
| Detroit, MI | $65,000 | $900 | 1.38% | Highest rent ratios, select neighborhoods |
| Indianapolis, IN | $150,000 | $1,300 | 0.87% | Balanced growth + cash flow |
| Memphis, TN | $120,000 | $1,100 | 0.92% | Established investor market |
| Birmingham, AL | $100,000 | $950 | 0.95% | Emerging, landlord-friendly |
| Kansas City, MO | $140,000 | $1,200 | 0.86% | Stable Midwest fundamentals |
| St. Louis, MO | $110,000 | $1,050 | 0.95% | Affordable entry points |
The 1% Rule in 2026: Traditional 1% rule (monthly rent = 1% of purchase price) is harder to achieve in most markets. In 2026:
- 1%+ markets: Cleveland, Detroit, Memphis, Birmingham
- 0.8-1%: Indianapolis, Kansas City, St. Louis
- 0.5-0.7%: Most coastal markets (BRRRR very difficult)
Why Midwest Dominates BRRRR:
| Factor | Coastal | Midwest |
|---|---|---|
| Purchase price | $400K+ | $60-150K |
| Rent | $2,500 | $900-1,300 |
| Rent/Price ratio | 0.6% | 1.0%+ |
| Cash flow @ 7% rate | Negative | Positive possible |
| Capital at risk | $100K+ | $20-50K |
Rehab Budgeting and Hard Money Carrying Costs
Accurate cost estimation prevents capital from getting stuck in deals:
Rehab Cost Benchmarks (2025-2026):
| Rehab Level | Cost/SqFt | Scope |
|---|---|---|
| Light Cosmetic | $15-25 | Paint, flooring, fixtures |
| Moderate | $25-40 | + Kitchen/bath updates, landscaping |
| Full Rehab | $40-60 | + Systems, roof, windows |
| Gut Renovation | $60-100+ | Down to studs |
Common Rehab Line Items:
| Item | Low | Average | High |
|---|---|---|---|
| Interior Paint (whole house) | $3,000 | $5,000 | $8,000 |
| LVP Flooring (1,200 sqft) | $4,000 | $6,000 | $9,000 |
| Kitchen Rehab (mid-range) | $10,000 | $18,000 | $30,000 |
| Bathroom Rehab | $5,000 | $8,000 | $15,000 |
| HVAC Replacement | $5,000 | $8,000 | $12,000 |
| Roof (asphalt, 1,500 sqft) | $6,000 | $10,000 | $15,000 |
| Electrical Panel | $1,500 | $2,500 | $4,000 |
| Water Heater | $800 | $1,200 | $2,000 |
Hard Money Carrying Costs (5-Month Hold):
| Cost Component | Calculation | Amount |
|---|---|---|
| Loan Amount | $140,000 | — |
| Interest (12% annual) | $140K × 12% × 5/12 | $7,000 |
| Points (3 points) | $140K × 3% | $4,200 |
| Property Taxes | $200/mo × 5 | $1,000 |
| Insurance | $100/mo × 5 | $500 |
| Utilities | $200/mo × 5 | $1,000 |
| Total Holding Cost | $13,700 |
Always include holding costs in your All-In calculation—they can exceed rehab costs on longer projects.
BRRRR Exit Strategies When Things Go Wrong
Not every BRRRR goes according to plan. Have backup strategies:
Scenario 1: Appraisal Comes in Low
| Expected | Actual | Impact |
|---|---|---|
| ARV: $250K | ARV: $210K | -$40K value |
| Cash-Out: $187.5K | Cash-Out: $157.5K | -$30K cash |
Options:
- Wait for appreciation and refinance later
- Keep as rental, leave capital in deal
- Sell and recover what you can
- Dispute appraisal with better comps
Scenario 2: Rent Comes in Low
| Expected | Actual | Impact |
|---|---|---|
| Rent: $1,500/mo | Rent: $1,200/mo | -$300/mo |
| Cash Flow: +$200 | Cash Flow: -$100 | Negative cash flow |
Options:
- Improve property to justify higher rent
- Hold at loss while building equity
- Sell to investor (turnkey premium)
- Section 8 (often higher rents, guaranteed payment)
Scenario 3: Rehab Goes Over Budget
| Budget | Actual | Impact |
|---|---|---|
| Rehab: $40K | Rehab: $60K | +$20K invested |
| All-In: $180K | All-In: $200K | Less capital recovery |
Options:
- Reduce scope on cosmetic items
- Renegotiate with contractors
- Factor into next deal's budgeting
- Partner with someone who has more capital
Scenario 4: Can't Refinance (DSCR too low)
| Required | Actual | Impact |
|---|---|---|
| DSCR: 1.2 | DSCR: 0.95 | No loan approval |
Options:
- Increase rent (improvements, market timing)
- Pay down principal with cash to lower payment
- Use hard money refi (higher rate, but gets cash out)
- Partner refinance (stronger borrower)
Pro Tips
- 💡Use ultra-conservative ARV estimates—reduce your expected ARV by 10-15% before calculating maximum purchase price to protect against appraisal shortfalls.
- 💡Build DSCR lender relationships before you need them—they often have no seasoning requirement, enabling faster capital recycling.
- 💡Document every rehab improvement with dated before/after photos—provide these to your appraiser to justify the increased value.
- 💡Underwrite at 70% LTV even if lenders advertise 75%—this builds in buffer for conservative appraisals and tighter lending.
- 💡Target rent-to-price ratios above 1% to ensure cash flow at current 7%+ interest rates—most sub-1% properties will lose money post-refinance.
- 💡Factor holding costs into your All-In budget—hard money interest, taxes, insurance, and utilities during rehab can exceed $15,000 on a 5-month project.
- 💡Consider the opportunity cost of 12-month seasoning—your capital is tied up and unavailable for other deals during that period.
- 💡Have exit strategies before closing—know your plan if the appraisal comes in low, rent disappoints, or you can't refinance.
- 💡Start in Midwest markets (Cleveland, Detroit, Indianapolis) where the math works at current rates before attempting coastal BRRRR deals.
- 💡Track your actual costs meticulously—your data from completed deals is your best tool for underwriting future purchases accurately.
- 💡Build a cash reserve equal to 6 months of mortgage payments before starting your BRRRR - unexpected vacancies or repairs can sink your project.
- 💡Consider Section 8 rentals for guaranteed rent payments during seasoning periods - government-backed tenants provide payment security.
- 💡Join local real estate investor meetups to find private money lenders who offer better terms than traditional hard money.
- 💡Focus on neighborhoods with strong employment growth and low crime - tenant quality directly impacts your cash flow and property condition.
- 💡Get multiple contractor bids but weight reliability and speed over price - a contractor who finishes on time saves more in holding costs than cheap labor.
- 💡Use property management from day one if scaling to 5+ units - self-management burns out BRRRR investors and limits deal flow.
Frequently Asked Questions
Yes, but BRRRR requires tighter underwriting in 2025-2026. With cash-out refinance rates at 7-7.75% and LTV limits of 70-75%, the "perfect BRRRR" (100% capital recovery) is rare. Most investors now leave 5-15% of capital in each deal. The strategy remains viable in markets with strong rent-to-price ratios (Cleveland, Detroit, Indianapolis, Memphis) where properties can cash flow at current rates. Buy deeper, use conservative ARV estimates, and target 80-90% capital recovery.
