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Category Valuation & Analytics

1 Buy & Rehab

Purchase Price

Rehab Budget

Closing Costs (Buy)

Holding (Total)

Tax, Ins, Utils during rehab

2 Refinance Strategy

Loan Strategy (Presets)

After Repair Value (ARV)

Max LTV %

New Interest Rate %

Refi Closing Costs

3 Rental Operations

Monthly Rent

Vacancy Rate %

Prop. Taxes /yr

Insurance /yr

Maint/CapEx %

Cash Left In Deal-Initial Investment

Cash on Cash ROI-Annualized Return

Monthly Cashflow-Net Profit

Day 1 Equity-Total Net Worth bump

Risk & Ratios

DSCR Ratio: -
70% Rule Check: -
Break-Even: -

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About

The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) is the gold standard for scaling a real estate portfolio with limited capital. However, the difference between a portfolio-building home run and a liquidity trap lies in the mathematics of the Refinance Phase. Unlike standard mortgage calculators, this tool serves as a full-cycle simulator.

We engineered this analyzer to solve the "Refi Trap" - the scenario where a low appraisal or strict Loan-to-Value (LTV) limits force you to leave unexpected cash in the deal. By calculating your Net Equity Capture and infinite Return Potential, this tool provides a clear "Go/No-Go" signal based on current lending environments (DSCR, Conventional, or Hard Money).

Formulas

This tool utilizes a multi-phase algorithm to determine the efficiency of capital recycling.

1. Total Capital At Risk (TCAR):

TCAR = Price + Rehab + Closing_buy + (HoldCosts_mo × Months)

2. The "Perfect BRRRR" Check (Equity_trapped):

{

NewLoan = ARV × LTVCashOut = NewLoan − TCAR − Closing_refi

If CashOut is positive, CoC → ∞.

3. Debt Service Coverage Ratio (DSCR):

GrossRent − OpEx (excluding debt)Principal + Interest + Taxes + Insurance

Lenders use DSCR to qualify the asset itself, independent of the borrower's personal income.

Reference Data

Metric	Formula / Logic	Target Benchmark (The "Sweet Spot")	Risk Threshold
The 70% Rule	Purchase + Rehab ≤ 0.70 × ARV	≤ 70% - 75% of ARV	> 80% (High risk of trapped cash)
Cash-on-Cash (CoC)	(AnnualCashFlow ÷ CashLeftIn) × 100	12% - 20% (or ∞)	< 6% (Better to invest in index funds)
DSCR Ratio	GrossRent ÷ PITIA	≥ 1.25	< 1.10 (Loan denial likely)
Equity Capture	ARV − NewLoan − CashLeftIn	≥ 20% Day 1 Equity	< 10% (Market fluctuation risk)
Refi Seasoning	Time required before refinancing based on new value	0 - 6 Months	> 12 Months (Kills velocity)

Frequently Asked Questions

A Grade F deal indicates negative cash flow or "negative leverage," where the cost of borrowing exceeds the return on the asset. It may also signal that you are leaving more than 30% of your capital trapped in the deal, which defeats the purpose of the BRRRR strategy (velocity of money).

This is the most overlooked expense. When you refinance, you are originating a completely new loan. This incurs title fees, origination points (often 1-2% for investment loans), and appraisal fees. Ignoring this ~3-5% cost can turn a profitable deal into a loss.

The longer you must hold the property before refinancing, the higher your "Holding Costs" (hard money interest, utilities, insurance). Every month of delay increases your Total Cost Basis, thereby reducing the amount of cash you can pull out at the end.

Purchase Price is what you pay for the distressed property today. ARV (After Repair Value) is what the property will be worth once renovations are complete. The spread between these two numbers, minus the rehab costs, is your forced equity.

Most investors scale using DSCR (Debt Service Coverage Ratio) loans because they don't require personal income verification. Lenders typically require a DSCR above 1.20 or 1.25. If your deal calculates below 1.0, the rent doesn't cover the mortgage, and you likely won't get funded.