What is the BRRRR strategy in real estate?

BRRRR = Buy, Rehab, Rent, Refinance, Repeat. It is a real estate investment strategy where you purchase a distressed property below market value, renovate it to increase its value and rental income, rent it out to stabilize cash flow, then do a cash-out refinance based on the After Repair Value (ARV) to recoup most or all of your initial capital, then repeat the process with the returned money.

What is the 70% rule in BRRRR investing?

The 70% rule states your maximum allowable offer (MAO) should be no more than 70% of ARV minus repair costs. Formula: MAO = (ARV × 0.70) − Repair Costs. Example: ARV = $350,000, repairs = $50,000. MAO = ($350,000 × 0.70) − $50,000 = $195,000. The 30% buffer covers closing costs (2–3%), holding costs (3–5%), vacancy contingency (5%), agent fees if you sell (6%), and profit margin. Some investors use 65–75% depending on market conditions and personal risk tolerance.

What is a good cash-out refinance LTV for BRRRR?

Most lenders allow cash-out refi up to 75% LTV for investment properties. BRRRR investors typically target 70–75% LTV to keep a 5% equity cushion. ARV × 75% = max refinance amount. Example: $350,000 ARV × 75% = $262,500 max refinance. If your total invested (purchase + repairs + closing) was $200,000, you recover $62,500 of your capital. Experienced investors with strong local lender relationships can sometimes push to 80% LTV, especially on multi-unit properties.

How much should I budget for repairs in a BRRRR deal?

Repair budgets vary by scope and market: Light cosmetic (paint, carpet, fixtures): $10–$25/sqft. Moderate renovation (kitchen/bath updates, flooring, some systems): $30–$60/sqft. Heavy rehab (gut renovation, structural, electrical, plumbing): $75–$150+/sqft. Always add a 15–20% contingency buffer. Common forgotten costs: permit fees, architect drawings, soft costs during hold period (insurance, utilities), and punch list items. Get 3 contractor bids and use the median estimate.

What are the biggest BRRRR mistakes to avoid?

Top BRRRR mistakes: (1) Overpaying — buying at retail price eliminates the BRRRR advantage. Always negotiate below MAO. (2) Underestimating repairs — run detailed scope of work, not guesswork. (3) Ignoring holding costs — include mortgage, taxes, insurance, utilities, and HOA during the rehab period (typically 3–6 months). (4) Skipping the cash-out refi — do not just rent and hold; the refi is how you recycle capital. (5) Not vetting the market — ARV must be supported by recent comparable sales in similar condition. (6) Over-leveraging — keep at least 2–3 months of reserves per property.

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BRRRR Calculator

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BRRRR is a five-step strategy: Buy below market, Rehab to force equity, Rent for income, Refinance to recover capital, then Repeat.

The BRRRR Calculator shows whether your deal returns enough equity after refinancing to justify the strategy. Enter purchase price, rehab costs, ARV, rent, and loan terms to get cash left in deal, cash-on-cash return, and a clear BRRRR verdict. Rule of thumb: buy at 70% of ARV minus rehab costs.

Tool Demo — How It Works (Visual Walkthrough)

Follow these steps to analyze your deal in seconds.

Step 1

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Enter Purchase Price

Add the purchase price and estimated rehab costs for the property.

Step 2

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Add ARV & Rehab Costs

Input After Repair Value and your total renovation budget.

Step 3

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Set Refinance Terms

Choose your refinance LTV (typically 70–75% of ARV).

Step 4

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See Refinance Results

Instantly see cash left in deal, equity built, and monthly cash flow.

🎬 Video walkthrough coming soon — check back for a full step-by-step tutorial.

Illustrative example

BRRRR Calculator

Buy · Rehab · Rent · Refinance · Repeat

Purchase Price ($)

Rehab Costs ($)

After Repair Value ($)

Refinance LTV (%)

Monthly Rent ($)

Monthly Expenses ($)

Data: ESTIMATE SEEK EXPERT ADVICE LAST UPDATED Apr 2026

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Financial estimates only — not professional advice. Results are calculated projections based on your inputs. BRRRR projections are estimates. Actual refinance amounts depend on lender underwriting, appraisal value, and market conditions. ARV is not guaranteed. Consult a lender and licensed appraiser before proceeding. Real estate investments involve risk. Consult a licensed financial advisor, CPA, or real estate attorney before making investment decisions. Full disclaimer →

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Community Insights

Based on 1,243 calculations

Updated May 26, 2026

$145,000

Avg purchase price

$38,000

Avg rehab cost

$225,000

Avg ARV

Anonymized data from RealEstateStackHub users. Updated daily.

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Features

✓Purchase analysis
✓Rehab costs
✓ARV estimation
✓Refinance scenario
✓New equity calculation

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📖 BRRRR Strategy Guide ⚖️ Compare BRRRR Calculators 🏗️ How to Calculate ARV

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