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The $318,750 refinance returns 86.1% of the $370,000 you put in. The other $51,250 stays in the property until you sell or refinance again.

What the refinance hands back, and what stays in

$370,000 all in

Returned at refinance$318,750
Left in the deal$51,250

The math, with your numbers

All-in cost$370,000Purchase + rehab + carrying costs$300,000 + $60,000 + $10,000

Refinance loan$318,750ARV × LTV$425,000 × 75%

Cash left in$51,250All-in cost − refinance loan, not below zero$370,000 − $318,750

Share recovered86.1%Refinance loan ÷ all-in cost, capped at 100%$318,750 ÷ $370,000

If ARV comes in 10% low$83,125All-in cost − (ARV × 0.9 × LTV)$370,000 − ($382,500 × 75%)The loan shrinks by $31,875 and that amount stays in the deal instead.

The result is the same if a short-term loan funded the purchase. The refinance pays that loan off first, and the cash still in the deal is the all-in cost minus the new loan either way.

How this calculator works

The strategy is buy, rehab, rent, refinance, repeat, and the arithmetic that decides it happens at the refinance. Cash Left In = (Purchase + Rehab + Carrying Costs) minus Refinance Proceeds, where proceeds are after-repair value times the lender loan-to-value. A property bought at $300,000 with $60,000 of rehab and $10,000 of carrying costs has $370,000 in it. Refinanced at a $425,000 ARV and 75% LTV, the new loan is $318,750 and $51,250 stays in the deal.

The repeat step depends entirely on that final number, because it is the capital unavailable for the next purchase. A refinance returning everything is the version the strategy is usually described with. A refinance leaving $51,250 stranded is the version that happens when the appraisal comes in under the estimate or the lender caps LTV lower than the plan assumed.

Key insights

ARV is the assumption the whole strategy rests on, and an appraiser sets it after the money is already spent. A 10% miss on a $425,000 ARV moves refinance proceeds by $31,875 at 75% LTV, which on this deal is the difference between most of the cash coming back and most of it staying in.

Seasoning requirements control the timeline. Many lenders require a holding period before they will lend against the new appraised value rather than the purchase price, and every month of that wait is carrying cost the deal has to fund.

The refinanced loan is larger than a conventional purchase loan on the same building, so coverage after the refinance is tighter than it would otherwise be. Pulling maximum cash out and holding DSCR above the lender floor are competing objectives on the same transaction.

Rehab budgets are estimates made before the walls are open. Cash left in moves dollar for dollar with overruns, and it moves against you during the same window the ARV risk is still unresolved.

Frequently asked questions

How does the BRRRR refinance work?›

The lender appraises the finished property and lends a percentage of that after-repair value, commonly around 75%, rather than a percentage of what you paid. The new loan pays off the acquisition financing and returns the difference as cash.

What is the 70% rule in BRRRR?›

A screen that caps all-in cost at roughly 70% of ARV, so that a refinance at 75% LTV returns the invested capital. It is a filter for which deals are worth underwriting, not a substitute for running the actual refinance math on the actual terms.

Why did I not get all my money back?›

Three usual causes: the appraisal came in below the ARV estimate, the rehab ran over budget, or the lender allowed less LTV than planned. All three land in the same place, which is capital stuck in a property instead of funding the next one.

What is seasoning and why does it matter?›

A required holding period before a lender will refinance against appraised value rather than purchase price. It delays the point at which capital is recycled, and the carrying costs during that period come out of the deal.

Does BRRRR still work at higher interest rates?›

The refinance step is where rates bite, because the larger cash-out loan has to stay above the lender coverage minimum at the new rate. When the rate exceeds the property cap rate, pulling maximum cash out and passing DSCR stop being simultaneously achievable.

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