BRRRR Property Example: Cash Left in the Deal, DSCR and Cash Flow

Use this guide if...

This guide explains the main BRRRR assumptions before you test a scenario.

• You are modeling buy, rehab, rent and refinance Use it when the refinance proceeds and rental cash flow both matter.
• You want cash left in the deal explained It shows how project cost, refinance LTV and refinance costs affect unrecovered cash.
• You need to read DSCR and cash flow together A refinance can return cash but still leave a thin income cushion.

Main inputs explained

These inputs connect the project side of BRRRR with the rental and refinance side.

• Purchase price and rehab These create the project cost before refinance proceeds are considered.
• After-repair value ARV is the value assumption used to estimate refinance loan size.
• Refinance LTV The refinance loan amount is based on ARV multiplied by the LTV assumption.
• Refinance costs Closing, appraisal, legal or lender costs reduce cash returned.
• Rent, vacancy and expenses These determine net operating income before the refinance mortgage payment.
• New loan rate and term These set the refinance mortgage payment used for DSCR and cash flow.

Worked example

Suppose a property is bought for 200,000, rehabbed for 45,000, reaches a 320,000 ARV and refinances at 75% LTV.

Total project cost

255,000

200,000 purchase, 45,000 rehab and 10,000 of buying or holding costs.

After-repair value

320,000

The value assumption used for refinance sizing.

Refinance loan

240,000

75% of the 320,000 ARV before refinance costs in this simplified example.

Refinance costs

5,000

Costs reduce refinance proceeds available to return project cash.

Cash left in deal

About 20,000

Project cost minus refinance proceeds after costs.

Rent and expenses

2,500 rent, 650 expenses

Vacancy is assumed at 5% before operating expenses.

DSCR and cash flow

About 1.11 DSCR, 168 per month

Before tax and before irregular repairs or capital events.

The example leaves about 20,000 in the deal after refinance costs and has thin positive monthly cash flow, so small assumption changes matter.

Result interpretation

Read the result as a scenario based on the assumptions entered, not as a decision rule.

What changes the result most

Before using the tool, gather the inputs or assumptions that are most likely to move the result.

• After-repair value ARV drives refinance loan size and cash returned.
• Rehab overruns Higher rehab costs increase project cost and cash left in the deal.
• Refinance LTV Higher LTV can return more cash, but lender rules and risk may differ.
• Rent, vacancy and rate These move NOI, refinance payment, DSCR and cash flow.

Common mistakes

These are common ways an estimate can become cleaner than the real-world scenario.

• Counting refinance proceeds as guaranteed Refinance amount depends on lender rules, valuation, costs and timing.
• Ignoring refinance costs Costs can reduce cash returned and increase cash left in the deal.
• Using gross rent as cash flow Vacancy, management, repairs, reserves, taxes or rates, insurance and debt service all matter.
• Treating DSCR as a full risk check DSCR is useful, but it does not capture every repair, tenant, tax, legal or lending risk.

Related calculators

Use these calculators to test rental cash flow, yield, DSCR and break-even rent separately.

Related guides

Use these guides to understand the rental metrics used in BRRRR results.

What to try next

Use the next step that matches the question you want to answer.