How do you analyze a BRRRR deal?

To analyze a BRRRR deal, you need five key inputs: purchase price, rehab budget, after-repair value (ARV), expected monthly rent, and refinance terms (rate, LTV, term). Calculate your total cash in (purchase + rehab + closing costs minus refinance proceeds), then determine Year 1 cash flow, Cash-on-Cash return, and 10-year IRR. A good BRRRR leaves little cash in the deal after refinancing.

What is a good cash-on-cash return for a BRRRR deal?

BRRRR deals often show very high or even infinite cash-on-cash returns because the refinance pulls most of your capital back out. The key metric is how much cash remains in the deal after refinancing. If you recover 100% of your investment, any positive cash flow produces an infinite CoC. Most investors look for at least $150–200 per unit per month in cash flow after the refinance.

What is the 75% rule in BRRRR?

The 75% rule refers to refinancing at 75% loan-to-value (LTV) of the after-repair value. For example, if your property appraises at $200,000 after rehab, you can refinance for a $150,000 loan. If your total project cost (purchase + rehab) was $140,000, you recover $150,000 minus closing costs — pulling out more than you put in.

How to Analyze a BRRRR Deal (Free Calculator)

The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) is one of the most powerful ways to build a rental portfolio with limited capital. The idea is simple: buy a distressed property below market value, renovate it, rent it out, refinance based on the new appraised value, and pull your cash back out to do it again. But running the numbers correctly is critical. A deal that looks great on paper can fall apart if your rehab costs run over or the refinance does not return enough cash.

This guide walks you through how to analyze a BRRRR deal step by step using the Quick Real Estate Analyzer, a free tool that calculates Cash-on-Cash return, IRR, cash left in the deal, monthly cash flow, and a full 10-year pro forma.

Step 1: Enter the Property Info

Start with the property address and unit count. For this example, we will analyze a single-family home that we plan to rent out as a long-term rental after rehab. In the Property Info section, enter the street address and set the unit count to 1. Set the monthly rent to what comparable renovated properties are renting for in the area.

Step 2: Set Your Deal Inputs

This is where the core numbers go. For our sample deal, we will use the following:

Sample BRRRR Deal

Purchase Price$120,000

Rehab Budget$30,000

After Repair Value (ARV)$200,000

Monthly Rent$1,800

Monthly Insurance$150

Monthly Taxes$200

The total project cost here is $150,000 (purchase plus rehab). With an ARV of $200,000, you have built-in equity from day one. That spread between project cost and ARV is what makes the BRRRR strategy work.

Step 3: Configure Your Financing

Under Financing, look at the BRRRR Refinance section. Set the refinance rate (current market rates for investment properties, often around 7%), the refinance LTV (typically 75% for conventional loans), and the loan term (usually 30 years). If you are using a hard money or bridge loan to fund the acquisition, toggle that on and enter the rate, points, loan-to-cost ratio, and term.

Hard Money Example

If you are borrowing 85% of the project cost at 12% interest with 2 origination points on a 12-month term, toggle on the hard money option. The calculator will factor in the carrying costs during rehab and show you exactly how much cash you need upfront versus what the lender covers.

Step 4: Review Your Assumptions

The Assumptions section lets you set vacancy rate, property management fees, CapEx reserves, closing costs, and growth rates. Start with conservative numbers: 5% vacancy, 8% management, 5% CapEx, and 3% annual rent growth and appreciation. You can always run the sensitivity analysis later to see how changes in these assumptions affect your returns.

Step 5: Calculate and Read the Results

Click Calculate All Strategies and switch to the BRRRR tab in the results. The key metrics to evaluate are:

Cash Left in Deal tells you how much of your own money stays tied up after the refinance. The dream scenario is getting all your cash back (or close to it) so your effective return is infinite. In our example, with a 75% LTV refinance on a $200,000 ARV, the refi loan is $150,000. After paying off the acquisition and closing costs, you should get most of your capital back.

Cash-on-Cash Return measures your annual cash flow divided by the cash left in the deal. If you only have $5,000 left in the deal and your annual cash flow is $3,000, that is a 60% CoC return.

10-Year IRR accounts for cash flow, appreciation, loan paydown, and a hypothetical sale in year 10. This gives you the complete picture of your total return.

Step 6: Run the Sensitivity Analysis

Click Show Sensitivity Analysis to see how your CoC and IRR change with different vacancy rates and rent levels. This helps you understand the downside risk. If your deal still shows positive cash flow at 10% vacancy and 10% below market rent, you have a deal with solid margins.

Step 7: Compare with Other Strategies

One of the biggest advantages of using Quick Real Estate Analyzer is that it calculates Buy & Hold and Flip results from the same inputs. Switch to the Buy & Hold tab to see what happens if you just put 20% down on a conventional loan instead of doing a full BRRRR. Switch to Flip to see what your profit would be if you sold immediately after rehab. This side-by-side comparison helps you pick the best strategy for each specific deal.

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