How the math works
How to use it
- The appraised value after rehab is the number the whole strategy rests on, and an appraiser sets it, not you. Run the deal at a value 10% below your estimate and see whether it still works.
- Include everything in the all-in cost, including the months you held it while the work was done. Money spent before the tenant moves in is still your money in the deal.
- Set the loan-to-value your lender actually offers on a cash-out refinance on an investment property. It is usually lower than a purchase loan.
- Read both headline numbers together. Cash left in and cash flow pull against each other — the bigger the loan you pull out, the less it cash flows.
A worked example
Bought at $120,000 with $38,000 of rehab and $4,000 of closing and holding, so $162,000 all in. It appraises at $235,000 and the lender refinances at 75%, which is a new loan of $176,250 — more than you spent, so all of your money comes back out plus $14,250. At $2,400 rent with 29% for vacancy, maintenance, reserves and management and $4,300 of taxes and insurance, NOI is $16,148 against a $1,202 payment, leaving $143 a month. Both halves work, which is rarer than the strategy usually sounds.
Where this sits in the Financial Literacy resource
A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.
Common questions
What does BRRRR stand for?
Buy, rehab, rent, refinance, repeat. You buy something that needs work, fix it, put a tenant in, refinance against the higher value, and use the returned capital to do it again. The appeal is that one pot of money can buy several properties over time instead of one.
What is an "infinite return"?
It is what people call it when the refinance returns every dollar you put in, so the return is being divided by zero. It is a real and useful outcome, but it says nothing about whether the property makes money. A deal that returns all your capital and loses $200 a month has moved your money into something that now costs you. Both numbers have to work.
What is the biggest risk in BRRRR?
The appraisal. Everything downstream depends on the after-rehab value coming in where you expect, and you do not control it. If it appraises low, the new loan is smaller, your cash stays trapped, and the next deal does not happen. Running the numbers at a lower value is the single most useful thing you can do before committing.
Why is the cash flow worse after the refinance?
Because the point of the refinance is a bigger loan. Pulling capital out means borrowing more against the same rent, so the payment rises and what is left over falls. That tension is the strategy — it is not a flaw in the calculation.
Do lenders have a waiting period?
Many do, and it varies by lender and loan type. A cash-out refinance on an investment property commonly has a seasoning requirement measured in months, and the terms are usually less generous than a purchase loan. Ask your lender what theirs is before you plan the timeline around it.
What this calculator is not
It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this math works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.
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