The BRRRR strategy — Buy, Rehab, Rent, Refinance, Repeat — is how investors recycle capital across multiple deals. Buy below market value, rehab to force appreciation, rent it out to stabilize, refinance to pull your cash back out, and repeat with the next property. The math works on paper. The question is whether it works on your specific deal.
A BRRRR calculator spreadsheet answers that question by modeling the entire cycle before you make an offer. This guide walks through every calculation the spreadsheet should perform and the metric that determines whether a BRRRR deal actually works.
ARV is After Repair Value — what the property is worth after the rehab is complete. The 70% rule leaves 30% margin for holding costs, closing costs, and profit. This is your maximum purchase price, not your offer price.
Example: A property has an ARV of $200,000. Rehab will cost $35,000. Your MAO is ($200,000 x 0.70) - $35,000 = $105,000. If the seller wants $130,000, the deal does not work at 70%. Some investors use 75% for hot markets, but you are accepting thinner margins and more risk.
The rehab budget is where most BRRRR deals go sideways. Underestimating rehab by 20% can turn a profitable BRRRR into a capital trap. A good calculator tracks rehab costs by category:
The 10% contingency rule: If your rehab budget does not include a contingency line, you do not have a budget — you have a wish list. Every experienced investor budgets 10-15% above their itemized estimate. New investors should use 15-20%.
While the property is being rehabbed, you are paying for it without earning rent. Holding costs include:
A typical residential rehab takes 3-6 months. On a $120,000 hard money loan at 12% interest, monthly holding cost is $1,200 in interest alone. Four months of holding adds $4,800 to your total investment that most napkin-math calculations miss.
This is the step that makes BRRRR work. After the rehab is complete and the property is rented, you refinance into a conventional or DSCR loan based on the new appraised value (the ARV).
LTV is the Loan-to-Value ratio your lender offers. Typical refi LTV is 75%. If your ARV is $200,000 and you get a 75% LTV loan, the new loan is $150,000. If your total investment (purchase + rehab + holding + closing) was $140,000, you get $10,000 back minus refi closing costs.
Cash left in the deal is the BRRRR metric that determines whether you can actually repeat. It is the amount of your original investment that stays locked in the property after the refi.
Ideal: $0 or negative (you got all your capital back plus profit). Acceptable: under $10,000 left in for a property generating $200+/month cash flow. Red flag: $20,000+ trapped in the deal — your capital is not recycling.
If your cash left in the deal is zero, your Cash-on-Cash return is technically infinite — you are earning cash flow on a property you have no capital in. This is the entire point of BRRRR. If the refi does not return most of your capital, you have a buy-and-hold deal that happened to need a rehab, not a true BRRRR.
Every assumption in a BRRRR model can be wrong. The rehab could cost more. The ARV appraisal could come in low. The refi rate could be higher than expected. A sensitivity analysis table shows how your cash-left-in-deal changes across a range of scenarios:
If the deal only works at exactly your assumptions, it does not work. A robust BRRRR still pencils at pessimistic estimates.
MAO, rehab budget, holding costs, cash-out refi, and cash-left-in-deal — all in one spreadsheet. Sensitivity analysis shows how your returns change. $29, one-time purchase.
See the BRRRR CalculatorWhat does BRRRR stand for in real estate investing?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy works by purchasing a distressed property below market value, renovating it to force appreciation, renting it to stabilize income, refinancing to pull out the equity created by the rehab, and repeating the cycle with the returned capital. The goal is to end up with a cash-flowing rental property with little or none of your own capital permanently tied up in it.
How do I calculate Maximum Allowable Offer (MAO) for a BRRRR deal?
The 70% rule is the standard starting point: MAO = (ARV × 0.70) − Rehab Costs. ARV is the After Repair Value — what the property is worth after renovation. The 30% buffer covers holding costs, closing costs, and profit margin. On a $200K ARV property with $35K in rehab, your MAO is ($200K × 0.70) − $35K = $105K. Some investors use 75% in competitive markets, accepting thinner margins.
What DSCR do lenders require for a BRRRR cash-out refinance?
Most conventional lenders require a minimum 1.25x DSCR for a cash-out refinance. DSCR loan programs — which underwrite based on the property's rental income rather than personal income — typically set a 1.10–1.20x floor. A DSCR below 1.0 means the rental income does not cover the mortgage. The deal does not work as a rental regardless of the rehab quality.
What is "cash left in the deal" and why does it matter for BRRRR?
Cash left in the deal is the amount of your original investment that remains in the property after the cash-out refinance. If you invested $140K total (purchase + rehab + holding + closing) and the refi returned $135K, you have $5K left in the deal. Ideally it is zero or negative — meaning the refi returned all your capital plus pulled out additional equity. If $20K or more remains trapped, the BRRRR did not recycle your capital as intended and your capacity to repeat is reduced.
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