BRRRR Method Calculator (Real Estate)
Calculate the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) real estate strategy. Determine cash recycled and remaining equity.
As an Amazon Associate and CJ Affiliate publisher we earn from qualifying purchases. Prices and availability may vary.
BRRRR Method Strategy Guide
What's the key thing to understand about The BRRRR Method Explained?
BRRRR = Buy, Rehab, Rent, Refinance, Repeat. The strategy popularized by Brandon Turner and BiggerPockets. Goal: buy distressed property below market, renovate to force appreciation, rent it out, then cash-out refinance to recover most/all of your cash, and use that cash to buy the next property. Done well, you can build a rental portfolio with the same initial capital deployed many times. The math: buy at 70-75% of After Repair Value (ARV) minus rehab cost. After rehab, refinance at 75% loan-to-value of the new, higher appraised value, pulling out most or all of the original cash invested to redeploy into the next property.
What should I know about The 70% Rule?
Classic BRRRR formula: Max Purchase Price = (ARV × 0.70) - Rehab Cost. Example: ARV $200,000, rehab $30,000. Max purchase = $200,000 × 0.70 - $30,000 = $110,000. Buying at $110,000 means $110,000 + $30,000 = $140,000 all-in for a property worth $200,000 — 70% LTV. At 75% cash-out refi, you get $150,000 back, recovering all $140,000 plus $10,000 in your pocket. The 70% buffer covers: closing costs (both buy and refi), holding costs during rehab, vacancy during lease-up, and small ARV miss. In hot, competitive markets, some investors stretch this rule to 75-80%, accepting a thinner margin of safety in exchange for being able to compete for deals at all.
What should I know about Where BRRRR Fails?
Common BRRRR disasters: (1) ARV overestimation — actual appraisal comes in 10-20% below your projection. Refi loan smaller than expected, cash stuck. (2) Rehab cost overruns — bid 30k, actual 50k. Eats your profit margin. (3) Holding too long — every month of rehab = $1,500+ in interest, taxes, utilities, insurance. (4) Bad rental market — lease-up takes 3 months instead of 3 weeks. (5) Refi rates jumped — 5% rate when modeled becomes 8% rate at refi, payment 50%+ higher, cash flow negative. (6)
What should I know about Hard Money to Conventional — The Transition?
Most BRRRR deals use short-term hard money / private money for purchase + rehab. Typical hard money: 10-13% interest, 2-4 points origination, 12-month max term. Designed for quick fix-and-flip OR refinance into conventional. The seasoning period: conventional cash-out refi typically requires 6-12 months of ownership (Fannie/Freddie 'delayed financing exception' allows refi up to original cost without seasoning, but cap is purchase price + closing costs, not ARV). Use Fannie Mae's HomeStyle Renovation loan as an alternative route that combines purchase and rehab financing into a single conventional loan from the outset, avoiding the hard-money-then-refinance sequence entirely.