BRRR (Buy-Refurb-Refinance-Rent) Calculator

Calculate returns on a BRRR strategy including cash recycling and long-term yield.

PropertyCalculators.ai
Updated Dec 2024
4.9
Creative Strategies
Intermediate
2 min

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Your Results

Cash Left in Deal

£25,055

Cash on Cash Return

3.89%

Total Cash Invested£160,055
Refinance Mortgage£135,000
Equity Released£135,000
Gross Yield (on ARV)5.67%
Monthly Cash Flow£81
Annual Cash Flow£975
Infinite Return?No
Equity Position£45,000

Quick Insights

Tight cash flow - consider contingency

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What is BRRR?

The BRRR Calculator is essential for property investors using the Buy-Refurb-Refinance-Rent strategy. BRRR allows investors to recycle capital by purchasing undervalued properties, adding value through refurbishment, refinancing at the new higher value, and then renting for ongoing income - ideally with all or most of their original cash returned. This calculator helps you assess whether a potential BRRR deal works financially. It calculates how much cash you can recover through refinancing, your ongoing cash flow, and whether you can achieve the holy grail of BRRR - an "infinite return" where all your original capital is returned while you retain ownership and rental income.

How do I calculate brrr?

This calculator models the complete BRRR cycle: **Phase 1: Acquisition & Refurb** - Total Cash Invested = Purchase Price + Refurb Cost + Purchase Costs + Bridging Costs - Bridging is modelled at 50% average drawdown for refurb (phased spending) - Includes arrangement fees (2%) and monthly interest **Phase 2: Refinance** - Refinance Amount = After Repair Value (ARV) × Refinance LTV - Equity Released = Refinance Amount (pays off bridge) - Cash Left in Deal = Total Invested - Equity Released **Phase 3: Rent** - Gross Yield = (Annual Rent ÷ ARV) × 100 - Monthly Cash Flow = Rent - Mortgage Payment - Expenses - Cash on Cash Return = (Annual Cash Flow ÷ Cash Left In) × 100 **Infinite Return Test** If Cash Left in Deal ≤ 0, you've achieved an infinite return - all capital recycled with ongoing income.

Key assumptions in this calculation

1Bridging finance used during refurbishment phase
2Bridging fees at 2% arrangement (deducted from analysis)
3Refurbishment costs drawn at 50% average over the bridge term
4Refinance is on interest-only BTL mortgage
5Refinance completes immediately after refurb (no delay)
6ARV valuation is achieved (surveyors can be conservative)
7No SDLT refund for uninhabitable property is modelled
8Void period between refurb and tenancy not included

When to use this calculator

Evaluating potential BRRR deals before purchase
Calculating maximum purchase price for target cash return
Understanding how much refurb budget you can allocate
Stress testing deals against lower ARV valuations
Comparing multiple BRRR opportunities
Presenting deal analysis to JV partners
Planning capital recycling across multiple projects
Understanding breakeven refurb spend for full cash return

Frequently Asked Questions

What makes a good BRRR deal?

The ideal BRRR deal has: purchase price 20-25% below ARV, scope for meaningful value-add through refurbishment, strong rental demand for quick let-up, and an ARV that supports 75% LTV refinance covering all costs. Target properties that are cosmetically tired but structurally sound - avoid major works unless you're experienced.

What if I cannot get all my money back?

Not every BRRR achieves full cash recycling. Even leaving some money in can deliver excellent returns. If you invest £40,000 total and leave £10,000 in but receive £200/month cash flow, that's still 24% annual return on cash employed. The key is whether the return justifies the capital deployment.

How long should a BRRR project take?

Typical timeline: 1-3 months to find and purchase, 2-4 months for refurbishment, 1-2 months to refinance and let. Total 4-9 months from first viewing to cash returned. Experienced investors might complete 2-3 BRRR projects per year with the same capital pot.

What are the main risks with BRRR?

Key risks include: refurb cost overruns eating into margins, ARV valuation coming in lower than expected (surveyors are often conservative), extended refurb timelines increasing bridging costs, difficulty refinancing (ICR stress tests, lender criteria changes), and void periods before letting. Always have contingency.

Should I use bridging or cash for BRRR?

Using bridging amplifies returns (higher cash-on-cash) but adds costs and complexity. If you have the cash, running costs are lower and refinance pressure is reduced. Many investors prefer 70% bridging to conserve cash for multiple projects. The choice depends on your capital, experience, and risk appetite.

Important Disclaimer

BRRR investing involves significant risk including property values falling, refurbishment costs exceeding budgets, and refinancing not being available at expected terms. This calculator provides estimates only. Always conduct thorough due diligence and seek professional advice.

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