How is the cash-out refinance amount calculated?

The new loan equals ARV multiplied by the refinance LTV (typically 70 to 75 percent). For a $280,000 ARV at 75% LTV the lender writes a $210,000 loan. If that exceeds your total cash invested (purchase plus rehab plus closing costs), you have recovered all your capital and your cash-on-cash return is effectively infinite.

How long until I can refinance after the rehab?

Most conventional lenders impose a six-month seasoning period before they will lend against the new appraised ARV rather than your purchase price. During that window you carry the property on cash or a bridge or hard-money loan, so factor the carrying cost into the deal.

BRRRR Method Calculator — Free Online Tool

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Walk-through

How to Use This Calculator

3 steps

1

Enter the acquisition

Input the distressed purchase price and your rehab budget. Together these are your total capital invested — the money you need to recover at refinance.

2

Add the ARV and refinance terms

Enter the after-repair value (ARV), the refinance LTV your lender allows (usually 70-75%), the new rate, and the term. The calculator derives the cash-out loan and the cash returned to you.

3

Read capital recovery and returns

Review cash left in the deal, cash-on-cash return, cap rate, and repeat potential. Use the Deal Analysis tab for the 70% rule and the Refinance Timing tab to model seasoning carry.

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Reference

Formula & Methodology

3 formulas

Cash Left in Deal

Cash Left = (Purchase + Rehab) - (ARV x Refi LTV)

Total capital invested minus the cash-out refinance proceeds. A zero or negative result means you recovered all your capital — the core BRRRR goal — and any negative amount is tax-free cash pulled out above your basis.

Cash-on-Cash Return

CoC = Annual Cash Flow / Cash Left in Deal x 100%

Annual pre-tax cash flow divided by the capital still tied up after refinancing. When cash left is zero or negative, all capital is recovered and cash-on-cash is effectively infinite.

Monthly Cash Flow

Cash Flow = NOI/12 - Monthly P&I, where NOI = (Rent - Expenses) x 12

Net operating income after the new fully-amortizing refinance mortgage. The refinance loan is larger than a normal purchase loan, so BRRRR deals run thinner cash flow than buy-and-hold.

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YMYL

Trust, Methodology & Sources

Reviewed by Calculover Editorial Review · Updated 2026-05-30 · 3 sources

Editorial accountability

Author: Quinn Sumner{{^authorProfileUrl}}Quinn Sumner{{/authorProfileUrl}} - Editor

Owner: Quinn Sumner - Editorial owner

Reviewer: Calculover Editorial Review - Source and limitation review

Last reviewed: 2026-05-30

Last verified: 2026-05-30

Methodology

The BRRRR Method Calculator sizes the cash-out refinance as ARV times the refinance LTV, computes the new payment with the standard fully-amortizing mortgage formula, derives NOI as annual rent minus expenses, and reports cash left in deal, cash-on-cash, cap rate, return on equity, and capital recycled. The 70% rule and bridge-loan carrying cost use the entered ARV, rehab, rate, and seasoning months.

Assumption: The original acquisition is all-cash or hard-money that is paid off in full at refinance, so the new loan returns cash to you.

Assumption: Monthly expenses you enter already include taxes, insurance, management, CapEx, and vacancy; the calculator does not add reserves on top.

Assumption: The cash-out loan equals ARV times the refinance LTV, with no separate appraisal, lender, or closing fees deducted unless you reduce the inputs yourself.

Limitations & guidance

Actual cash-out proceeds depend on the appraised ARV, the lender's investor LTV cap, seasoning rules, your credit, and DSCR underwriting — any of which can come in below this estimate.

The model does not compute income taxes, depreciation recapture, refinance closing costs, or appreciation beyond the entered ARV.

A low appraisal or rate increase between purchase and refinance can leave far more capital in the deal than projected.

Professional guidance: The BRRRR Method Calculator is for educational and planning purposes only and is not financial, investment, tax, or lending advice. It is not a loan offer or appraisal. Confirm ARV, refinance rate, LTV, seasoning, and closing costs with a qualified lender and real estate professional before committing to a deal.

Primary sources

What is a cash-out refinance? - Consumer Financial Protection Bureau

Publication 527, Residential Rental Property - Internal Revenue Service

BRRRR Method Definition - Investopedia

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Glossary

Key Terms Explained

8 terms

BRRRR Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle the same capital across many rental properties by recovering it through a cash-out refinance after forcing appreciation.

After Repair Value (ARV) The appraised market value of the property once renovations are complete. The cash-out refinance loan is sized as a percentage of ARV, so an accurate ARV estimate is the most important input.

Cash-Out Refinance A new mortgage larger than the amount owed, with the difference returned to the borrower in cash. In BRRRR it repays the acquisition cost and returns your invested capital.

Loan-to-Value (LTV) The refinance loan amount as a percentage of ARV. Investment cash-out refinances are typically capped at 70-75% LTV, which limits how much capital you can pull back out.

Seasoning Period The time a lender requires you to own a property before refinancing against its new appraised value rather than the purchase price — commonly six months for conventional loans.

Forced Appreciation Value added through renovation rather than market growth. Forcing the ARV well above purchase-plus-rehab is what makes the cash-out refinance large enough to recover capital.

Cash Left in Deal Capital that remains invested after the cash-out refinance. Lower is better; a BRRRR deal that leaves zero cash in produces an infinite cash-on-cash return.

Repeat Potential The capital recovered at refinance that you can redeploy into the next acquisition. The whole point of BRRRR is recycling this money deal after deal.

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Scenarios

Real-World Examples

3 worked examples

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Recovered capital, infinite CoC

Textbook BRRRR

Purchase Price $150,000 Rehab Cost $50,000 ARV $280,000 Refi LTV / Rate 75% / 7.5%

Total invested is $200,000 and the refinance loan is $280,000 x 75% = $210,000, so the cash-out fully repays your capital and hands back $10,000 tax-free. Cash left in the deal is zero, making cash-on-cash infinite — though the $210,000 loan leaves monthly cash flow slightly negative at this rate.

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Capital still in the deal

Lower ARV

Purchase Price $150,000 Rehab Cost $50,000 ARV $250,000 Refi LTV / Rate 75% / 7.5%

Here the refinance loan is only $250,000 x 75% = $187,500, so $12,500 of your $200,000 stays trapped in the deal. Cash-on-cash is now finite and driven by that remaining capital — a reminder that a weaker ARV, not the rehab budget, is what most often breaks a BRRRR.

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70% rule discipline

Max allowable offer

ARV $280,000 Rehab Cost $50,000 70% Rule Ceiling $146,000 Actual Offer $146,000

The 70% rule caps your offer at 0.70 x $280,000 - $50,000 = $146,000. Buying at or below that ceiling is what leaves enough spread for the cash-out refinance to recover your capital. Overpaying on the purchase is the single fastest way to leave cash stuck in the deal.

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Deep Dive

Understanding the BRRRR Method

3 chapters · 4 min read

The BRRRR method — Buy, Rehab, Rent, Refinance, Repeat — lets real estate investors recycle the same pool of capital across many rental properties. This calculator models the part that makes or breaks the strategy: how much of your invested capital the cash-out refinance returns, and what return the deal earns on whatever is left.

How the BRRRR method works

BRRRR has five steps. You buy a distressed property well below market, rehab it to force appreciation, rent it to a tenant for cash flow, refinance with a cash-out loan based on the new after-repair value (ARV), and repeat with the capital you pulled back out.

The math hinges on the refinance. Your cash-out loan equals ARV times the lender's LTV cap — usually 70-75%. If that loan is at least as large as your total cash invested (purchase plus rehab), you recover all your capital and your cash-on-cash return becomes infinite, because you have zero dollars left in the deal still earning the cash flow.

Inputs and what drives the result

The most important input is ARV, because the refinance loan is a percentage of it. A conservative, comparable-backed ARV protects you; an optimistic one leaves capital trapped when the appraisal comes in low. Refinance LTV and rate come next: a 75% cash-out returns far more than a 70% one, and a higher rate raises the new payment and can push monthly cash flow negative even on a great equity deal.

Use the Cash-on-Cash Calculator for a standard buy-and-hold rental and the Fix & Flip Profit Calculator if you plan to sell rather than refinance. The Cap Rate Calculator helps you sanity-check the unlevered yield this tool reports.

Is BRRRR still viable, and where it breaks

BRRRR still works, but higher rates since 2022 have changed the math. A 7-8% refinance rate produces a much larger payment than the sub-4% rates of the prior decade, so deals that once cash-flowed positively after a full cash-out can now run negative. Tighter investor LTV caps also leave more capital stuck in each deal.

The strategy now demands discipline: deeper purchase discounts (honor the 70% rule), accurate ARV estimates backed by comparable sales, and a realistic rehab budget with contingency. Watch the seasoning period too — most lenders make you own the property six months before they will lend against the new ARV, so budget the bridge or hard-money carrying cost on the Refinance Timing tab. This calculator is an educational model, not a lender commitment; confirm appraised ARV, rate, LTV, and seasoning with your lender before you buy.

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Questions

Frequently Asked Questions

5 questions

How does the BRRRR method work?+

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market, renovate it to force appreciation, rent it for cash flow, then do a cash-out refinance at the after-repair value to recover most or all of your invested capital — which you then redeploy into the next deal.

What does this BRRRR calculator show me?+

It models the full deal: total capital invested, the cash-out refinance loan, how much cash comes back, how much stays in the deal, your cash-on-cash return (infinite when capital is fully recovered), cap rate, monthly cash flow, return on remaining equity, and the capital you can recycle into the next purchase.

How do I refinance after the rehab?+

Once renovations are complete and the property is rented, you apply for a cash-out refinance based on the new appraised after-repair value rather than your purchase price. Most conventional lenders require a six-month seasoning period first, during which you carry the property on cash or a bridge/hard-money loan.

Is the BRRRR method still viable in a high-rate environment?+

Yes, but it is harder. Higher refinance rates raise the new mortgage payment and can turn cash flow negative, and tighter LTV caps leave more capital trapped. Success now requires deeper purchase discounts, accurate ARV estimates, and a realistic rehab budget so refinance proceeds stay high and the payment remains serviceable.

What is the 70% rule in BRRRR?+

The 70% rule says your maximum offer should be no more than 70% of the after-repair value minus the rehab budget: Max Offer = ARV x 0.70 - Rehab. It builds in a spread that, after a 75% cash-out refinance, is usually enough to recover your invested capital. Overpaying on the purchase is the most common reason a BRRRR leaves cash trapped in the deal.

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BRRRR Method Calculator