Guide · BRRRR
BRRRR analysis: buy, rehab, rent, refinance, repeat
A BRRRR lives or dies at the refinance. The new loan is sized on the after-repair value, and the rent has to carry it. The app models the bridge phase and the cash-out refinance, then tests the property on the permanent loan.
Coverage after the refinance
The refinance is modelled at 75% of after-repair value and 7.25% by default. If rent does not cover that payment at 1.25x, a DSCR lender will cut the loan and your capital stays in the deal.
Capital returned
The share of your cash that the refinance pays back. The default target is 90%. Below that, the deal still might work, but it is a hold, not a repeat.
Equity created by the rehab
After-repair value over the all-in cost. Without enough forced equity there is nothing for the refinance to pull out.
A busted BRRRR is useful too
The worked example below busts: the refinance returns all the capital, but the rent cannot carry the new loan. That is exactly the deal that looks good until month six.
Worked example: brrrr
Buy, rehab, rent, refinance: single-family rental, $118,000 purchase, $38,000 rehab, $232,000 after repair, $1,950 rent per unit. Verdict: Busted, 33/100. No price clears every gate at these numbers: the income or the costs have to change.
| Test | Default bar | Kind | This deal | Result |
|---|---|---|---|---|
| Coverage after refinance | 1.25 minimum | Hard gate | 0.98 | Short |
| Cash flow per unit after refi | $200 minimum | Hard gate | -$29 | Short |
| Capital returned at refinance | 90% minimum | Target | 100.0% | Clears |
| Equity created by the rehab | 15% minimum | Target | 32.8% | Clears |
Illustrative numbers, screened with the default experienced-investor targets. Open the same deal in the app from the samples on the first screen.