Guide
BRRRR refinance
Team RE Underwrite Lab
What the refinance is doing
In a BRRRR sketch, the refinance is the step that might return part of the cash you already spent. The new loan is a percent of the after-repair value you type, not a check the page can order. Closing costs on that new loan come out before you call the rest cash back.
The BRRRR method article on this site uses one set of sample figures. This page uses another, still made up, so the two writeups are not the same arithmetic. Neither one is a funded loan.
Formula
Cash in, in this all-cash sketch, is purchase plus rehab plus buying costs. New loan is after-repair value times the refinance loan-to-value. Cash back is the new loan minus refinance closing costs. Cash left in is cash in minus cash back.
A bridge loan, which the BRRRR calculator can include, would be paid off by the new loan before any remainder comes back to you. This page leaves the bridge out on purpose so the four lines stay visible.
Example
Illustrative example. Purchase $129,000, rehab $36,000, and buying costs $3,100 put $168,100 of cash in. After-repair value is $210,000. A new loan at 70% of that value is $147,000. Refinance closing costs of 1.5% are $2,205, so cash back is $144,795. Cash left in the deal is $23,305. These figures are made up so the subtraction is visible.
If the lender will only go to a lower percent of value, cash back falls and cash left in rises. The page does not know what a lender will do. Type the percent from a term sheet when you have one.
Common pitfalls
Many lenders require a seasoning period, often several months of ownership, before they will size a refinance off after-repair value. Inside that window the loan may be based on your purchase price or total cost instead. Type the basis and loan-to-value from a term sheet; this page does not know a lender's seasoning rule.
Forgetting to pay off a bridge, or forgetting refinance closing costs, treats the whole new loan as cash in your pocket. Cash back is what is left after those payoffs.
Steps
Add purchase, rehab, and buying costs
That sum is cash in, in an all-cash sketch that has no bridge loan to pay off.
Take a percent of after-repair value
Subtract refinance closing costs from that loan. What remains is cash back only if a lender funds it.
Subtract cash back from cash in
The difference is cash left in the deal. A smaller loan leaves more of your cash stuck.
Questions
Does this page fund the refinance?
No. It subtracts the numbers you type. A lender, an appraisal, and a term sheet are outside the page.
Why is this example different from the BRRRR method article?
So the two pages do not repeat one worked example. The calculator is where you change purchase, rehab, value, and rent together.
What happened to the bridge loan?
This sketch buys with cash so the refinance math is four lines. The BRRRR calculator is where a bridge, points, and a monthly holding line are included.
Is cash left in the deal the same as cash-on-cash?
No. Cash left in is a dollar amount still stuck after the refinance. Cash-on-cash divides later cash flow by cash invested.
Can the new loan be larger than the cash I put in?
In the arithmetic, yes, if the loan minus closing costs exceeds cash in. Whether a lender allows that is not something this page decides.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.