BRRRR Calculator: How to Run the Refinance Math

A BRRRR calculator answers one question: after you buy, rehab, rent, and refinance, how much of your own cash is still stuck in the property? Everything else - cash flow, cash-on-cash, the story you tell a partner - follows from that single figure. This guide walks the math line by line so you can run it in a spreadsheet, in your head at a showing, or in the free Basis calculator.

The five steps, as math

BRRRR is two deals stapled together: a short-term acquisition-and-rehab deal funded with expensive money, then a long-term rental funded with cheap money. The handoff between them is where deals are won or lost.

1. Buy. Purchase price plus acquisition closing costs. If you are using hard money, add points up front.
2. Rehab. Scope cost plus a contingency. Under-scoping here shows up later as a lower ARV and a longer hold.
3. Rent. Market rent minus vacancy, taxes, insurance, maintenance, capex reserve, and management.
4. Refinance. New loan = ARV x refinance LTV. Pay off the bridge loan and the rehab draw with the proceeds.
5. Repeat. Whatever cash came back out is the capital available for the next deal.

The one formula that decides the deal

Cash left in the deal is total cash invested minus refinance proceeds returned to you:

Total cash in   = down payment + rehab + closing costs
                  + holding costs during rehab

Refi loan       = ARV x refinance LTV

Cash returned   = Refi loan - payoff of acquisition
                  and rehab debt - refi closing costs

Cash left in    = Total cash in - Cash returned

When cash left in is zero or negative, the property is producing cash flow against none of your own money. That is the outcome Basis labels Infinite return: cash-on-cash has no denominator left.

A worked example

Illustrative numbers, rounded for readability. Substitute your own market's taxes, rates, and rent.

Thirteen thousand left in on a $175,000 asset is a workable BRRRR, not a home run. Now move one input: if the ARV comes back at $160,000 instead, the refinance funds $120,000 and cash left in jumps to $25,000 - the same deal, the same rehab, nearly twice the capital stranded. ARV is the most sensitive input in the whole model, which is why an estimate without a confidence level attached is close to useless.

Does it still cash flow after refi?

Cash left in is only half the verdict. The refinanced loan is larger than a conventional purchase loan would have been, so the debt service is larger too. Run rent minus operating expenses minus the new payment, and check the debt service coverage ratio - net operating income divided by annual debt service. A DSCR below roughly 1.20 is where lenders start declining and where a single bad month turns into an out-of-pocket month.

A BRRRR that pulls all your cash out but cash-flows $40 a month is not a win. Both numbers have to clear at once, which is exactly the trade-off a single-answer calculator hides.

Where BRRRR calculators mislead people

• Seasoning ignored. Many lenders require 6-12 months of ownership before they will refinance at appraised value rather than your purchase price. Refinancing on cost instead of ARV can erase the entire strategy.
• Holding costs left out. Interest, taxes, insurance, and utilities across a rehab that runs long are real money and they come out of your pocket, not the loan.
• One ARV, no range. A point estimate with no confidence attached invites you to underwrite the optimistic case.
• No alternative exit. A property that is a weak BRRRR is often a strong flip, or a thin wholesale spread worth assigning. If your calculator only models one exit, you never find out.

How Basis runs this

Basis models the bridge-to-refi handoff explicitly rather than treating the refinance as a footnote: hard-money terms and the true hold period on the front end, refinance LTV, seasoning, and rate on the back end. The output is a verdict - Infinite return, Strong BRRRR, Workable BRRRR, or Weak BRRRR - with the cash-left-in figure behind it, plus a deal score, a confidence score, and a risk score, each 0-100.

The same inputs are scored against Buy & Hold, Fix & Flip, and Wholesale at the same time, so a weak BRRRR still tells you whether the property is worth buying some other way. The AI Analyst writes a second opinion alongside the deterministic math, with the same caveat it carries everywhere in the product: AI opinion - verify locally before money moves.

Want to run one right now without an account? The free Basis deal calculator is public, no signup required.