How much of your own money stays locked in a BRRRR deal? On the default one, a $400,000 purchase, $55,000 of renovation and a $620,000 value after repairs, only $16,400 is still in the property once the refinance closes. Change the inputs below to test your own plan.
What does BRRRR stand for?
Buy, renovate, rent, refinance, repeat. You buy a property that needs work, often with a short-term loan, and fix it up. When tenants move in, you refinance at the new, higher value and use the proceeds to pay off the short-term loan. Whatever cash comes back is seed money for the next purchase, and the calculator measures how much fails to come back.
| Step | Default amount |
|---|---|
| All-in cost with 6 months of short-term interest | $481,400 |
| Cash put in before the refinance | $161,400 |
| New mortgage at 75% of $620,000 | $465,000 |
| Cash returned at the refinance | $145,000 |
| Cash left in the deal | $16,400 |
| Cash flow after the new mortgage, yearly | $5,548 |
How the default deal adds up
The full cost comes to $481,400, and that’s the price, the renovation, $12,000 of costs and $14,400 of interest on the $320,000 short-term loan. Take away the loan and you’ve put in $161,400. The new $465,000 mortgage repays the loan and hands back $145,000, which leaves $16,400 in the property.
Rent is $4,200 a month. After 4% vacancy and the listed expenses, that leaves $5,548 a year once the mortgage is paid. Investors call the return on the leftover cash cash-on-cash, and here it’s 33.83%.
What if the appraisal comes in low?
This is the risk that sinks plans. Say the lender values the property at $560,000. The new mortgage shrinks to $420,000, and the $145,000 that came back becomes $100,000. Cash left in the deal jumps to $61,400. Yearly cash flow actually rises to $8,813, because the payment is smaller, yet the return on the cash left falls to 14.35%.
One low appraisal, and the whole plan changes shape.
Where do BRRRR plans go wrong?
Mostly in the value after renovation. Trust recent sales of finished homes nearby, not the number you’re hoping for, and test a figure below your target, because that’s the one that bites. The holding period trips people up next. Every extra month adds interest and taxes, and the calculator prices interest only on the short-term loan.
It warns you when net income covers the new mortgage by only a thin margin, since a lender may refuse that refinance, and it’s a fair warning to take seriously. What it doesn’t do is model taxes on rent, closing delays or a short-term loan that ends before the refinance is ready. To check the rest of the yield, use the cap rate calculator and the cash-on-cash return calculator.
Where do the numbers come from?
Every amount in the results comes from what you type, and the defaults are sample values, not market data. Don’t read them as a market view. The mortgage payment compounds the rate twice a year, the usual Canadian method, and spreads the loan over the 25 or 30 years you pick. The short-term interest is simple interest on the loan for the months you enter. This site has no tie to a lender, the CRA or any government body. Rates and lending limits change. Each lender has its own refinance rules too, so confirm them before you buy, not after.
Planning to hold and rent without a short-term loan? The rental property calculator fits that. For a closer look at the refinance itself, try the mortgage refinance calculator.
Frequently asked questions
What does BRRRR mean?
Buy, renovate, rent, refinance and repeat. You fix up a property, rent it, then refinance to pull your cash back out.
What counts as a good result?
The less cash left in the deal, the harder your money works. Zero means everything you put in came back at the refinance.
Why did my return jump when little cash stayed in?
Cash-on-cash return divides yearly cash flow by the cash left. A tiny divisor makes a huge percentage, so read it next to the dollar cash flow.
What if the appraisal comes in low?
The new mortgage shrinks and less cash comes back. On the default deal, a $560,000 value leaves $61,400 in the property.
Can I buy with cash only?
Yes. Enter 0 for the short-term loan and the calculator drops the interest and the loan repayment.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.