What is the BRRRR method?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy an undervalued property (often with cash or hard money), rehab it to force appreciation, rent it to stabilize income, then cash-out refinance based on the new After-Repair Value (ARV) to pull most or all of your capital back out — and repeat the process on the next deal.

How do you calculate a BRRRR deal?

Add every dollar in (purchase + rehab + purchase closing costs + holding costs during rehab) to get your all-in cost. Multiply the ARV by your lender's refinance LTV (typically 70–75%) to get your refi loan amount. Subtract refi closing costs and your all-in cost from the refi loan — a positive number is cash back to you; a negative number is cash left in the deal.

What is the 75% rule in BRRRR?

The 75% rule says your all-in cost should be no more than 75% of ARV, because most cash-out refinance lenders cap you at 75% LTV. If you're all in at 75% or less, you recover 100% of your capital on refinance. Above 75%, you leave money in the deal.

What refinance LTV can I get on a BRRRR?

On a stabilized rental cash-out refinance in the US, most DSCR and conventional investment-property lenders cap you at 70–75% LTV. Owner-occupants using an FHA 203(k)-style refi can go higher, but most BRRRR investors underwrite to 75% max and treat 70% as the conservative case.

What is 'infinite return' in a BRRRR deal?

If your refinance pulls out 100% of your all-in capital, you have $0 left in the deal. Any positive cash flow after that divided by $0 is mathematically infinite — an 'infinite cash-on-cash return.' It only works when the ARV is high enough relative to your all-in cost and the property still cash-flows the higher refinance payment.

What holding costs should I include?

During rehab you still owe property taxes, insurance, utilities, and interest on any acquisition financing (hard money or short-term loan). Add these up monthly and multiply by the expected months of rehab. Under-budgeting holding costs is the most common way BRRRR deals go from great to breakeven.

How is BRRRR different from a fix and flip?

A fix and flip ends at the sale — you buy, rehab, and sell for a lump-sum profit. BRRRR ends at the refinance — you keep the property, rent it, and use the refinance to recycle your capital into the next deal while collecting monthly cash flow and long-term appreciation on the property you already own.

What DSCR do I need after refinance?

Most DSCR cash-out refinance lenders require a minimum DSCR of 1.00 to 1.25 on the new loan. The higher payment from the refi loan is what tests the deal — a property that cash-flows easily as a cash purchase can be marginal after a 75% LTV cash-out refi at today's rates. Model the refi payment before you buy.

Buy · Rehab · Rent · Refinance · Repeat

BRRRR Calculator — Model Every Step of the Deal

Enter purchase price, rehab budget, ARV, and refinance terms to see how much capital you'll pull back out on the cash-out refi, whether the deal clears the 75% rule, and what monthly cash flow looks like on the new refinance payment.

Also try the DSCR calculator to underwrite the refinance loan, or the rental property calculator for stabilized cash-flow analysis.

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Industry-standard formulas

ARV, all-in cost, refi loan, cash-on-cash

Property label

Shown on the shared report and used in the PDF file name.

Purchase price

Rehab budget

Purchase closing costs

Rehab length

Monthly holding costs

Include taxes, insurance, utilities, and any hard-money interest paid during rehab.

After-Repair Value (ARV)

Refi LTV75%

Refi rate7.5%

Refi term

yrs

Refi closing costs3% of loan

DSCR cash-out refinances typically cap at 70–75% LTV. Under the 75% rule your all-in cost should stay at or below 75% of ARV.

Gross monthly rent

Vacancy5%

Property tax (annual)

Insurance (annual)

Maintenance5% of rent

Management8% of rent

Estimates only — verify with your lender and contractor.

Example deal — edit any number to analyze your own.

Cash left in deal after refi

$4,613

Under 75% rule

All-in cost $197,400 = 74.5% of ARV. Refi loan pulls out $192,788 of your capital.

Cash-on-cash

50.7%

Monthly cash flow

$195

Equity created

$67,600

Cap rate (ARV)

7.18%

Refi loan

$198,750

New monthly P&I

$1,390

All-in cost breakdown

Purchase $145,000 + Rehab $45,000 + Holding $3,400 + Closing $4,000.

BRRRR calculator FAQ

Everything US real estate investors ask about the BRRRR method, refinancing, and the 75% rule.

What is the BRRRR method?: BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy an undervalued property (often with cash or hard money), rehab it to force appreciation, rent it to stabilize income, then cash-out refinance based on the new After-Repair Value (ARV) to pull most or all of your capital back out — and repeat the process on the next deal.
How do you calculate a BRRRR deal?: Add every dollar in (purchase + rehab + purchase closing costs + holding costs during rehab) to get your all-in cost. Multiply the ARV by your lender's refinance LTV (typically 70–75%) to get your refi loan amount. Subtract refi closing costs and your all-in cost from the refi loan — a positive number is cash back to you; a negative number is cash left in the deal.
What is the 75% rule in BRRRR?: The 75% rule says your all-in cost should be no more than 75% of ARV, because most cash-out refinance lenders cap you at 75% LTV. If you're all in at 75% or less, you recover 100% of your capital on refinance. Above 75%, you leave money in the deal.
What refinance LTV can I get on a BRRRR?: On a stabilized rental cash-out refinance in the US, most DSCR and conventional investment-property lenders cap you at 70–75% LTV. Owner-occupants using an FHA 203(k)-style refi can go higher, but most BRRRR investors underwrite to 75% max and treat 70% as the conservative case.
What is 'infinite return' in a BRRRR deal?: If your refinance pulls out 100% of your all-in capital, you have $0 left in the deal. Any positive cash flow after that divided by $0 is mathematically infinite — an 'infinite cash-on-cash return.' It only works when the ARV is high enough relative to your all-in cost and the property still cash-flows the higher refinance payment.
What holding costs should I include?: During rehab you still owe property taxes, insurance, utilities, and interest on any acquisition financing (hard money or short-term loan). Add these up monthly and multiply by the expected months of rehab. Under-budgeting holding costs is the most common way BRRRR deals go from great to breakeven.
How is BRRRR different from a fix and flip?: A fix and flip ends at the sale — you buy, rehab, and sell for a lump-sum profit. BRRRR ends at the refinance — you keep the property, rent it, and use the refinance to recycle your capital into the next deal while collecting monthly cash flow and long-term appreciation on the property you already own.
What DSCR do I need after refinance?: Most DSCR cash-out refinance lenders require a minimum DSCR of 1.00 to 1.25 on the new loan. The higher payment from the refi loan is what tests the deal — a property that cash-flows easily as a cash purchase can be marginal after a 75% LTV cash-out refi at today's rates. Model the refi payment before you buy.

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BRRRR Calculator — Model Every Step of the Deal

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