BRRRR Calculator/Analyzer

36 Replies

I am not sure if this is the right place or not but I have recently bene going at the BRRR strategy exclusively and have build a spreadsheet that lets me quickly analyze a deal that comes across my inbox.

I hope this is useful to others. Pretty basic, just insert the inputs that are BOLD and then it will give you some analysis on the deal.

Default values are for an actual deal I am pursuing now.

For more info on BRRRR strategy see @Brandon Turner post here

You can find my file here

I welcome any feedback (good or bad) and as you can see by the current version I tweak often. I have tried my best to keep it clean and keep the !REF errors when values changed to a minimum :)

Updated over 2 years ago

I have added a video walking through the calculator and also a real life example so people can see how I use this file. https://youtu.be/AdqyGTDsJ9Y

Updated over 2 years ago

For the updated version of the file you can visit my fileplace and grab the BRRR Calculator here: https://www.biggerpockets.com/files/user/peeklay

Here is a screen shot so you can see what it has in it before downloading

Hey Brian when I click the link I am directed to s page that says,  "file does not exist"

Best Regards, 

Jon 

Well that's not good. The link works for me so not sure what's up.

Maybe see if you can hit my fileplace and then click into file from there?

http://www.biggerpockets.com/files/user/peeklay

Or here

looks really interesting - I tried both ways and both indicate "page not found".  Don't you just love technology?

@Brian Larson

Happy to help! Sent you a personal message to get this resolve.

link worked for me...

Cool idea, Maybe add spot for taxes, insurance, and management totals. 

Thank you! I have not tried to do a similar deal myself, but the link worked.

Originally posted by @Brian Larson :

I am not sure if this is the right place or not but I have recently bene going at the BRRR strategy exclusively and have build a spreadsheet that lets me quickly analyze a deal that comes across my inbox.

I hope this is useful to others. Pretty basic, just insert the inputs that are BOLD and then it will give you some analysis on the deal.

Default values are for an actual deal I am pursuing now.

For more info on BRRRR strategy see @Brandon Turner post here

You can find my file here

I welcome any feedback (good or bad) and as you can see by the current version I tweak often. I have tried my best to keep it clean and keep the !REF errors when values changed to a minimum :)

 What do you mean by "Rehab Contingency"? Thanks!

Originally posted by @Andrey:

What do you mean by "Rehab Contingency"? Thanks!

 

I use this as my 'buffer' on the rehab estimate. I have found that different GC's estimates can be aggressive and others conservative. Heck, one of my guys for my flips is pretty much always within 1% of estimate so I don't buffer but another guy consistently needs more so I put in a 10% buffer.

For the sake of the calculation it is simply adding that percentage amount to the Rehab estimate cell. you can keep this 0% and do the math yourself if you like when entering

brian

Originally posted by @Brandon Stevens :

Cool idea, Maybe add spot for taxes, insurance, and management totals. 

Brandon, I will likely expand this over time with taxes, insurance, etc but am simply using the NOI ratio for now. Basically I change this ratio based on my market knowing that it is close to 50% in Indy, but is better and closer to 55% in KC, etc.

By keeping it a little more vague I thought others could then apply their own percentages for maintenance, vacancy, capex, etc. I use 10% for main/capex, vacancy and PM but some folks will individually manage, not save for capex, have lower vacancy, etc...

thanks for checking it out.

b

Hi @Brian Larson this appears to be a great resource. What is Delta of Offer over 75% of ARV? Also, what is the NOI ratio, Is it amount of operating income compared to expenses? Why is greater than 50% is better? Also, how do you gauge things; ie if you have 4 yellow and 4 green?

Thanks,

Andrew

hey @Andrew Hofing great questions.

I have the long answer for delta and short. :)

LONG: Delta of offer over 75% of ARV is a figure showing how much we are paying over the 75% ARV threshold. This is in the case where maybe you make an offer that puts your purchase+rehab right at 75% but then they counter back a little higher. If you plug in the numbers you will see exactly how much over 75% threshold you are and if you want to do the deal anyhow. Think of it this way. Lets say you have a solid deal, great cashflow, location, DSCR, etc but you have to pay $2500 over the 75% mark, would you do the deal and just consider that the cost of a down payment once you refi? Maybe, maybe not.

SHORT: BRRR is not perfect and sometimes you cannot get everything under the 75%, this cell tells you how much you would have to pay in order to refi with the current ARV and costs to purchase/rehab

NOI Ratio is what I am applying against the monthly rent (think 50% rule). This is net operating income thus the higher this amount the more you are getting to keep with that rent. The lower the less you keep. You are stating it in terms of expenses which is part of the equation but this is the income part of equation thus higher is better. Example: 50% ratio says I keep $500 of $1000/mo rent. 55% says I keep $550 of that $1k.

As for gauging the deal, the greens and yellow are simply quick glance items. you have to apply your personal preferences. I put more weight into Cashflow and CoC Return than I do the others. So for instance, lets say you have a property spinning off $200/mo cashflow in years 2+ but the DSCR is yellow because its at 1.3 and the cap rate is yellow because its at 7.5%. That is a deal I would still do. I strongly prefer to have 1.4 or higher DSCR and I like a higher cap rate (as compared to the notes I buy) but they do not outweigh the $200/mo cashflow and are not BAD ENOUGH to kill the deal.

With that said, you mix in reds and we likely have a problem.

I hope that helps

To follow-up the question by @Andrew Hofing and my post above, I came across a deal today that is very interesting. This spits out that scenario that Andrew asked. What do I do if my metrics are mixed?

Here are the outputs on this property:

At first glance it may not seem worth it due to the DSCR and Price to Rent ratio but when you dig in and know the neighborhood of this house and the schools (all are 9-10 rating) and he fact that its an A+ area...well then it starts to make a lot more sense.

Especially with that ARV%. This may turn into a flip and then walk from there.

As you can see, the spreadsheet can do what it does but NOTHING is tried and true rule and you have to add outside factors that may not be quantitative in nature.

Brian

@Brian Larson

Tried out the spreadsheet it is a nice product.

I would add in more detail for your permanent financing such as a term...  Your spreadsheet assumes one will be financing with 30 yr loans.  Someone may only have available 15 yr loans or want to use a shorter term loan due to some other constraint.  It would be nice to have that capability.

An example would be my 2 lenders here only will do 15 and 20 yr loans being the property will be non owner occupied and is owned by an LLC. They pass the loan off to their commercial division and those are the only packages they offer. On a 20 yr the property has to be less than 5 yrs old. My "Bridge" financing is a LOC which has no term so one can pay interest only during the rehab/hold period.

Just offering constructive criticism.  Hopefully it will help, if not please disregard.  It really is a nice spreadsheet app.

Thanks,

Jeff

hey @Jeff V. thanks for the feedback. Its funny because I created this initially to allow me to quickly analyze a property per my BRRR methodology and then I would move all of the data into my 'real' analyzer spreadsheet. Over the past month I have began to use this more so I should probably take your feedback and@Brandon Stevens feedback and just evolve this into a full calculator/analyzer.

Making your change will be super easy and I also want to have a variable for ARV% target. if you are refiing into conventional with units 1-4 than 75% is fine, but with 5-10 it needs to be 70%.

Look for an update in the next week+ I will update here.

b

Originally posted by @Brian Larson :

hey @Jeff V. thanks for the feedback. Its funny because I created this initially to allow me to quickly analyze a property per my BRRR methodology and then I would move all of the data into my 'real' analyzer spreadsheet. Over the past month I have began to use this more so I should probably take your feedback and@Brandon Stevens feedback and just evolve this into a full calculator/analyzer.

Making your change will be super easy and I also want to have a variable for ARV% target. if you are refiing into conventional with units 1-4 than 75% is fine, but with 5-10 it needs to be 70%.

Look for an update in the next week+ I will update here.

b

Hi Brian ,

Stumbled on your thread and looked at your spreadsheet analysis. Thanks for contributing. I downloaded and compared with 2 other spreadsheets that I use and this appears to be a very nice  'quick' analyze to look at the metrics differently but come to the same conclusion. Essentially, with the outside factors as you mentioned like neighborhood and schools, the numbers bounce out with just minimum input.

I have had a few folks ask for my latest version of the file. I am actually a bit surprised at how many downloads this has, I hope it helps people. 

The file is in my fileplace and is version 1.3. There are many updates so if something is odd feel free to ask.

Thanks for sharing this Brian.

In the "input" section. Some of the variables titles are BOLD like "Rehab Contingency" and some aren't like "Calculated Offer Variance from List Price". Yet all of the data to the right is BOLD.

I'm just not clear on which cells should be modified and which ones just show calculations.

Also, the row that shows "Expenses". Is that a monthly expense and is that separate from the "Expenses" tab that calculates Tax, Insurance, Vacancy, etc.?

Thanks again for sharing your calculator.

@Brian Larson

Thanks for sharing! This is indeed a great spreadsheet! I'm currently researching apps and spreadsheets to see what to use. Yours is pretty cool. Since I'm still on the learning curve, I am wondering if there are tolerances or ranges for each of the percentages that could potentially result form your calculations.i know about the 2% rule, but what about the rest of the values? 

Thanks in advance for your response! 

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