What makes a BRRRR succeed or fail?

It hinges on the after-repair value (ARV) coming in. If ARV ≥ 1.4× purchase + rehab cost, you usually recover most of your capital at the 80% refi. If ARV is short, you leave significant capital in the deal — defeats the strategy.

What's the typical refi LTV?

Canadian lenders cap cash-out refinances at 80% LTV for owner-occupied and 75–80% for investment property. Above 80% requires CMHC insurance, which generally isn't available for cash-out.

How long between buy and refi?

Most lenders require a 6–12 month seasoning period before a cash-out refi at the new value. Some accept earlier with a fresh appraisal documenting the rehab. Plan around 9 months as the realistic median.

How is BRRRR different from a flip?

A flip sells the rehabbed property for cash and pays capital gains. A BRRRR holds the property as a rental and pulls cash via refinance — no taxable event. The trade-off: you take on long-term landlord work for tax efficiency.

What expense ratio should I use post-rehab?

Post-rehab properties run leaner because the major systems are new. 25–30% of gross rent is reasonable. Don't use 35–40% — that's for buying older operating properties without renovating.

BRRRR · Strategy

Will the BRRRR recover your capital?

BRRRR works when the cash-out refinance pulls your initial capital back out. This calculator models all five steps: initial cash in, the rehab budget, the after-repair value (ARV), the refi at your target LTV, and the capital still left in the deal afterwards.

Assumptions

Purchase price

Down payment

Purchase closing costs

Rehab budget

After-repair value (ARV)

Market value once rehab is complete. Get an appraiser, not a wishful number.

Rate (purchase)

Rate (refinance)

AmortizationRefi LTV

Most lenders cap cash-out refi at 80% LTV.

Refi closing costs

Gross monthly rent

Operating expenses

Results

Cash-out at refi

$107,000

Capital left in deal

$16,000

Initial cash invested$123,000

Purchase loan$210,000

Refinance loan$320,000

Refinance mortgage$1,907/mo

Post-refi monthly cashflow$181/mo

Cash-on-cash return13.6%

Foncier the whole deal

This number is one of seventy.

Cap rate is a start. The full Foncier analyzer adds DSCR, IRR, ten-year cashflow projections, scenarios, side-by-side compare, and live community rent comps — for free, on your first three deals.

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How this is calculated

Initial cash = down payment + purchase closing + rehab. New loan at refi = ARV × refi LTV. Cash-out = new loan − purchase loan − refi closing. Capital left = initial cash − cash-out. Post-refi cashflow = rent − opex − new mortgage payment. CoC = annual cashflow ÷ capital left in deal.

Worked examples

Successful and failed BRRRR scenarios.

Sherbrooke duplex · full recovery

$1,400/mo CF · CoC 110%

Buy $280k duplex with 25% down + $8k closing + $45k rehab = $123k in. ARV $400k → 80% refi loan = $320k. Old loan $210k. Cash-out $108k. Capital left only $15k. Cashflow $1,400/mo on $15k = ~110% CoC.

Cash in$123k

Cash-out$108k

Capital left$15k

CoC~110%

Bad ARV · failed BRRRR

Capital left $73k

Same deal but ARV only $340k (rehab over budget, market softened). 80% refi = $272k. Cash-out only $50k. Capital left $73k of original $123k. Still cashflows but you didn't free up the capital to repeat.

Cash in$123k

Cash-out$50k

Capital left$73k

CoC~23%

BRRRR questions

About the BRRRR strategy.

Buy, Rehab, Rent, Refinance, Repeat. The strategy buys distressed properties at a discount, forces appreciation through rehab, refinances at the new value, and pulls most of the capital back out to deploy on the next deal.

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