13 600 €
Review deal — significant capital left in property.
22/09/2026 08:48 · Calc v2.3.0
Deal Score
Fair Deal
96 €
8.5%
35 000 €
1.13
Capital Flow
Smart Insights
DSCR below lender threshold
DSCR of 1.13 is below 1.25. Most lenders require 1.25+ for BTL refinancing.
Refinance Summary
About This Calculator
This BRRRR (Buy, Renovate, Rent, Refinance, Repeat) Calculator is an essential tool for real estate investors looking to scale their portfolios efficiently. It helps evaluate the financial viability of acquiring distressed properties, adding value through renovation, securing tenants, and then leveraging the increased equity through cash-out refinancing to fund subsequent investments. This calculator is particularly useful for investors aiming to recycle their capital and build a sustainable, income-generating real estate portfolio without continuously injecting new funds.
How It Works
Step 1: Buy - Identify and Acquire a Distressed Property
This initial step involves identifying properties that are undervalued due to their condition or market position. Input the **purchase price** of the property and any **initial acquisition costs** (e.g., closing costs, legal fees). A thorough market analysis is crucial here to ensure the property has potential for appreciation and rental demand post-renovation. Consider the potential for value-add through renovation.
Step 2: Renovate - Estimate Renovation Costs and After-Repair Value (ARV)
Once acquired, the property needs renovation to increase its market value and appeal to tenants. This step requires estimating **renovation costs**, including materials, labor, and contingency funds (typically 10-20% of the renovation budget). Simultaneously, determine the **After-Repair Value (ARV)**, which is the property's estimated market value after all renovations are complete. The ARV is critical for calculating potential equity and refinance opportunities.
Step 3: Rent - Project Rental Income and Operating Expenses
After renovation, the property is rented out to generate income. Here, you'll input the **projected monthly rental income** based on market rates for similar, renovated properties. Also, estimate **monthly operating expenses**, such as property taxes, insurance, property management fees (if applicable), maintenance reserves, and vacancy rates. This step determines the property's cash flow and its ability to cover mortgage payments and generate profit.
Step 4: Refinance - Calculate Cash-Out Refinance Potential
With the property stabilized and generating income, the next step is to refinance. This involves obtaining a new mortgage based on the property's increased ARV. Key inputs include the **loan-to-value (LTV) ratio** (typically 70-80% of ARV for cash-out refinances) and the **new interest rate**. The calculator will determine the maximum loan amount and the **cash-out amount**, which is the capital available to be pulled out, ideally covering the initial investment and renovation costs.
Step 5: Repeat - Reinvest and Scale Your Portfolio
The final step involves using the cash-out proceeds from the refinance to acquire another distressed property, thus repeating the entire BRRRR cycle. This allows investors to continually grow their real estate portfolio, leveraging equity rather than constantly injecting new capital. This step emphasizes the long-term wealth-building potential and capital recycling aspect of the BRRRR strategy.
Worked Example — Braga, Portugal
In Braga, Portugal, assess a 240 000 € rental with 1 050 € expected monthly rent and 180 000 € financing at 3,2 %.
- →Enter the local acquisition price, the expected 12 months of rent and recurring costs.
- →Use the calculator to convert those inputs into the relevant return, cash-flow or equity metric.
- →Stress-test vacancy, repairs and the current local borrowing terms before committing.
The result is a country-specific screening scenario, not a market valuation or lending offer.
Frequently Asked Questions
Complete Guide to the BRRRR Strategy
What is BRRRR?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It is a real estate investment strategy that allows investors to build a rental portfolio by recycling their initial capital. Instead of leaving money locked in each property, investors force appreciation through renovation, then refinance to pull out most or all of their original investment.
How Does the BRRRR Strategy Work?
The strategy works in five phases: Buy a distressed property below market value, Rehab it to increase its value, Rent it to a qualified tenant, Refinance based on the new appraised value (ARV) to recover your capital, then Repeat the process with the recovered funds.
Key Metrics: DSCR and Cash-on-Cash Return
The Debt Service Coverage Ratio (DSCR) measures whether rental income covers debt payments. A DSCR above 1.0 means the property cash flows positively. Cash-on-Cash Return measures annual cash flow relative to the capital left in the deal — the higher, the better.
Common BRRRR Mistakes to Avoid
The most common mistakes include: overestimating ARV, underestimating rehab costs, not accounting for holding costs during renovation, overestimating rent, and not verifying that the refinance will cover your total project cost. Our calculator helps you avoid these by modeling the complete deal.
When Does BRRRR Not Work?
BRRRR may not work when: the purchase price is too high relative to ARV, renovation costs exceed the forced appreciation, rental income doesn't support a DSCR above 1.0, or refinance LTV limits prevent full capital recovery. Always run the numbers before committing.