BRRRR Calculator

What BRRRR is and how it actually works

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It's an investment strategy where each step funds the next. The idea is to buy a distressed or undervalued property, fix it up, get it rented at market rate, then refinance it based on the new (higher) post-rehab value — pulling most or all of your original cash back out. With that recycled capital, you do the next deal. Done well, you can build a portfolio of cash-flowing rentals without ever needing to add new outside money.

Each letter has a job:

• Buy — find a distressed property. Pay cash or use a hard-money loan (short-term, high-interest, asset-backed). The property is too rough or too quirky for a normal mortgage at this stage.
• Rehab — fix it up to a rentable standard. Cosmetic, mechanical, sometimes structural. The cheaper you can rehab to that standard, the more this strategy works.
• Rent — get a tenant in at market rent. The lender on the next step is going to use that rent to qualify the refi.
• Refinance — pull out a long-term, low-rate mortgage on the property's new (higher) appraised value. This is where you recycle the cash.
• Repeat — take that recycled cash and start again on the next property.

The 75% rule — the math that makes or breaks the cycle

For BRRRR to work cleanly, your total all-in cost (purchase + rehab + closing) needs to come in at roughly 75% of the After Repair Value (ARV). The reason: most cash-out refinances on investment property cap at 75% loan-to-value. So if the property appraises at $200,000 ARV, the refi will give you a loan of $150,000. If your all-in is $150,000, you walk out with all your cash back. If your all-in is $170,000, you leave $20,000 stuck in the deal — and that limits how fast you can repeat.

Where BRRRR deals fall apart

• ARV miscalculation. If you overestimate the after-repair value by 10%, you can easily end up leaving 30% of your cash in the deal. The ARV is the single most important number in this strategy and the easiest one to get wrong. Use real comps from the same neighborhood, same size, same condition — sold within the last 6 months. Don't use the highest comp; use the median.
• Rehab budget creep. Distressed properties always have surprises. The wall you opened up to fix one problem reveals two more. Pad your rehab budget by at least 20% — that's not pessimism, that's experience. After 12 years rehabbing in New England I rarely come in under budget.
• The rate environment. BRRRR was made famous in the era of 4% mortgage rates. At 7%+ refi rates in 2026, the cash flow math is much tighter. You can still BRRRR — but the deal you would have closed at 4% rates may not pencil at 7%. Run your numbers at the actual current rate, not at the rate from the BiggerPockets podcast you were listening to.
• Seasoning requirements. Most lenders won't let you do a cash-out refi at the new ARV until you've owned the property for 6-12 months. Plan for that gap. You'll need either cash reserves or hard-money loan terms long enough to bridge it.