Biggerpockets Brrrr Calculator

Analyze your Buy, Rehab, Rent, Refinance, Repeat real estate deals with precision.

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Refinance Details

Deal Summary Table

Metric	Value	Explanation
Purchase Price	$150,000.00	Initial cost to buy the property.
Rehab & Repair Costs	$30,000.00	Total cost of renovations.
Total Project Cost	$180,000.00	Total cash needed for purchase and rehab.
After Repair Value (ARV)	$250,000.00	Estimated market value after renovations.
Refinance Loan Amount	$187,500.00	Loan amount from refinancing based on ARV and LTV.
Cash Left in Deal	($7,500.00)	Total cost minus refinance loan. Negative is cash-out.
Gross Monthly Rent	$2,200.00	Total rent collected per month.
Operating Expenses	$990.00	Monthly costs (taxes, insurance, maintenance, etc.).
Monthly P&I Payment	$1,168.08	Principal and Interest on the new refinance loan.
Monthly Cash Flow	$41.92	Monthly profit after all expenses.
Annual Cash Flow	$503.04	Total yearly profit.
Cash on Cash Return	Infinite ∞	Annual cash flow divided by cash left in deal.

What is the BiggerPockets BRRRR Method?

The BRRRR method, an acronym popularized by the real estate investing community BiggerPockets, stands for Buy, Rehab, Rent, Refinance, Repeat. It is a powerful strategy designed to help investors build a portfolio of cash-flowing rental properties with minimal capital invested over the long term. Unlike traditional house flipping where the property is sold after renovation, the BRRRR strategy focuses on holding the asset to generate long-term wealth through rental income and appreciation.

This strategy is ideal for investors who are willing to take on renovation projects to force appreciation. The core principle is to acquire an undervalued property, increase its value through strategic improvements, and then refinance to pull your initial capital back out. A successful BRRRR deal often results in owning a cash-flowing rental property with little to no money left in the deal, allowing you to “repeat” the process with your recovered funds.

The BRRRR Calculator Formula and Explanation

This biggerpockets brrrr calculator uses several key formulas to determine the viability of a deal. Understanding the math behind the curtain is crucial for any real estate investor.

1. Total Project Cost: This is the total capital you need to bring the project to the point of being ready to rent.
   
   Formula: Total Project Cost = Purchase Price + Rehab Costs
2. Refinance Loan Amount: This is the amount the bank will lend you based on the property’s new value.
   
   Formula: Refinance Loan Amount = After Repair Value (ARV) * Refinance LTV (%)
3. Cash Left in Deal: This is the most critical number in the BRRRR strategy. It shows how much of your own money remains invested. A negative number means you’ve pulled out more cash than you put in (a “no money down” deal).
   
   Formula: Cash Left in Deal = Total Project Cost – Refinance Loan Amount
4. Monthly Mortgage Payment (P&I): The principal and interest payment on your new loan. This calculator uses the standard amortization formula.
5. Monthly Cash Flow: The profit you make each month.
   
   Formula: Monthly Cash Flow = Gross Monthly Rent – (Operating Expenses + Monthly Mortgage Payment)
6. Cash on Cash (CoC) Return: This measures the annual return on the actual cash you have invested.
   
   Formula: CoC Return = (Monthly Cash Flow * 12) / Cash Left in Deal

Variables Table

Key BRRRR Variables

Variable	Meaning	Unit	Typical Range
Purchase Price	Cost of acquiring the property.	Currency ($)	Varies by market.
Rehab Costs	Cost of all renovations and repairs.	Currency ($)	10-40% of Purchase Price.
After Repair Value (ARV)	The property’s market value after rehab is complete.	Currency ($)	125%+ of Purchase Price.
Refinance LTV	Loan-to-Value for the cash-out refinance.	Percentage (%)	70-80% for investment properties.
Operating Expenses	All costs to run the property (excluding mortgage).	Percentage (%)	35-50% of Gross Rent.

Practical Examples

Example 1: The Ideal BRRRR Deal

An investor finds a distressed property and runs the numbers using a biggerpockets brrrr calculator.

• Inputs:
  • Purchase Price: $120,000
  • Rehab Costs: $40,000
  • After Repair Value (ARV): $225,000
  • Monthly Rent: $2,000
  • Operating Expenses: 40% of rent
  • Refinance Terms: 75% LTV, 7% Interest, 30-year term
• Results:
  • Total Project Cost: $160,000
  • Refinance Loan: $168,750 (75% of $225,000)
  • Cash Pulled Out: $8,750 ($160,000 – $168,750)
  • Monthly Cash Flow: ~$250
  • Cash on Cash Return: Infinite (since no money is left in)

This is a home run. The investor not only owns a cash-flowing asset but also got paid $8,750 at the refinance closing to do the deal.

Example 2: A More Typical Scenario

Not every deal is a no-money-down grand slam. Here’s a more common scenario.

• Inputs:
  • Purchase Price: $180,000
  • Rehab Costs: $35,000
  • After Repair Value (ARV): $280,000
  • Monthly Rent: $2,500
  • Operating Expenses: 45% of rent
  • Refinance Terms: 75% LTV, 7% Interest, 30-year term
• Results:
  • Total Project Cost: $215,000
  • Refinance Loan: $210,000 (75% of $280,000)
  • Cash Left in Deal: $5,000 ($215,000 – $210,000)
  • Monthly Cash Flow: ~$115
  • Cash on Cash Return: 27.6% (($115 * 12) / $5,000)

Here, the investor leaves $5,000 in the deal but acquires a performing asset with an excellent 27.6% cash-on-cash return, which is still a fantastic investment.

How to Use This BiggerPockets BRRRR Calculator

Using this calculator is a straightforward process to quickly analyze a potential investment.

1. Enter Property & Cost Details: Input the Purchase Price, estimated Rehab Costs, and the After Repair Value (ARV). Be realistic with your ARV; base it on comparable sales (comps) in the area.
2. Input Rental & Expense Info: Add the projected Gross Monthly Rent and the estimated Operating Expenses as a percentage. The 50% rule is a quick estimate, but a more detailed 35-45% is often more accurate for well-managed properties.
3. Define Refinance Terms: Enter the Loan-to-Value (LTV) percentage your lender will offer on a cash-out refinance (typically 75% for an investment property), the interest rate, and the loan term.
4. Analyze the Results: The calculator instantly updates key metrics. The most important figure is ‘Total Cash Left in Deal’. Your goal is to get this number as close to zero as possible. Then, check the ‘Monthly Cash Flow’ to ensure the property is profitable and the ‘Cash on Cash Return’ to see the performance of your invested capital.

Key Factors That Affect BRRRR Success

• Accurate ARV: Overestimating the after-repair value is the most common and dangerous mistake. If the property doesn’t appraise for your target ARV, the entire strategy fails.
• Controlling Rehab Costs: Your rehab budget must be detailed and include a contingency fund (10-15%) for unexpected issues. Going over budget directly increases the cash you’ll leave in the deal.
• Favorable Financing: The terms of your refinance loan are critical. A higher LTV or lower interest rate can significantly improve your returns and reduce the cash left invested.
• Market Conditions: A strong rental market ensures you can place a tenant quickly at your target rent. A stable or appreciating housing market protects your investment’s value.
• Holding Costs: Remember to factor in costs during the rehab and rent-up phase, such as loan payments on the initial financing, utilities, and insurance.
• The Six-Month Seasoning Period: Many lenders require you to own the property for at least six months before they will do a cash-out refinance based on its appraised value rather than your cost basis.

Frequently Asked Questions (FAQ)

1. What is the 70% Rule in BRRRR?

The 70% rule is a guideline stating that an investor should pay no more than 70% of the ARV of a property, minus the cost of repairs. For example, if a home’s ARV is $200,000 and needs $30,000 in repairs, you should pay no more than $110,000 ($200,000 * 0.70 – $30,000). This helps build in a sufficient equity cushion.

2. What’s a good Cash on Cash Return for a BRRRR deal?

If you have money left in the deal, a good CoC return is typically considered to be above 12-15%. However, the ultimate goal of BRRRR is an infinite return, achieved when you pull all (or more) of your initial cash out of the deal.

3. How are operating expenses calculated?

Operating expenses include property taxes, insurance, property management fees, vacancy reserves (usually 5-10% of rent), repair/maintenance funds (5-10%), and any utilities the landlord pays. It does NOT include the mortgage payment.

4. What happens if my ‘Cash Left in Deal’ is a large positive number?

This means you either paid too much for the property, underestimated rehab, or the ARV wasn’t high enough. While the deal might still provide positive cash flow, it is no longer a true “BRRRR” as you haven’t repeated the cycle by recycling your capital.

5. Is the BRRRR strategy risky?

Yes, it carries more risk than a turnkey rental purchase. Risks include rehab projects going over budget, the property not appraising at the expected ARV, and longer-than-expected vacancies before renting.

6. How long does the BRRRR process take?

Typically, a full cycle takes 6 to 12 months. This includes finding the property, closing, completing the rehab (1-3 months), renting it out (1 month), and then going through the refinance process, which often includes a seasoning period of 6 months.

7. Can I use this strategy with no money?

While you can achieve a “no money left in the deal” outcome, you still need initial capital for the purchase and rehab. This often comes from private money lenders, hard money loans, or personal funds, which are then paid back by the cash-out refinance.

8. Why is there no input for a down payment?

This biggerpockets brrrr calculator assumes the initial purchase and rehab are funded with short-term financing (like a hard money loan or cash) that will be fully paid off by the refinance. The ‘Cash Left in Deal’ metric effectively represents the “down payment” that remains after the final loan is in place.