BRRRR budget update - not quite as I planned

[Robert Johnson]

I wanted to share a quick update on my current BRRRR project, since the numbers have shifted a bit from what I originally projected. Hoping this breakdown helps someone else and also curious how others handle "not quite perfect" BRRRRs.

Where I Stand

So far I’ve spent:

• $11K in closing costs

• $14K in renovations (with another ~$19K of work left)

That could put me at about $44K all-in before refinance if everything stayed on the high side. But realistically, I think I’ll come in under that number once it’s finished.

Potential Outcomes

Here's how the deal looks if I hit the $44K "worst case" and then refinance. For the refi PITI, I'm running a range since rates will impact where it actually lands. For rent, I'm conservatively using $1,500, but there's a chance it comes in closer to $1,600.

Category	Pre-Refi (All Cash In)	Post-Refi (80% LTV, $160K ARV)
Cash Invested	$44,000 (worst case)	$15,750 (after cash-out)
Loan Balance	$99,750	$128,000
Property Value (ARV)	$160,000	$160,000
Equity	$60,250	$32,000
Rent	$1,500–$1,600/month	$1,500–$1,600/month
PITI	$1,050/month	$1,150–$1,250/month (depends on refi rate)
Vacancy (8%)	$120–$128/month	$120–$128/month
CapEx (6%)	$90–$96/month	$90–$96/month
Net Cash Flow	~$234–$334/month	~$34–$234/month
Annual Cash Flow	~$2,808–$4,008	~$408–$2,808
Cash-on-Cash Return (CoC)	~6–9%	~3–17% (depending on rent + rate)

Takeaways

• If I end up at the full $44K worst case, pre-refi CoC sits around 6–9%.

• After refinance, I recycle most of my capital (only ~$15.7K left in the deal) which bumps CoC anywhere from 3% to as high as 17% depending on where rent lands ($1,500 vs $1,600) and what interest rate I get on the refi.

• Even if cash flow is modest at the start, I’ll still be holding ~$32K in equity and a property that benefits (albeit modestly) from appreciation and rent growth in my market.

It's definitely not the "perfect BRRRR" where every dollar comes back out, but I still see this as a long-term win.

Curious how others approach it when you land closer to “worst case” than “best case.” Do you chalk it up to equity and long-term wealth, or do you pivot mid-project to force stronger returns?

[Robert Johnson]

Quote from @Caleb Brown:

I would just continue as plan. BRRRs are great but many times they don't go as planned so only leaving 15.7K(worst case) is not the end of the world. You can look at comps to see if there is anything that can boost the ARV but I doubt there is anything that makes sense to do. Future ones maybe be more conservative and you'll know what to expect on the next.

It's certainly a learning experience for budgeting the rehabs. The good thing is that appreciation in Abilene should be higher than the rest of the country over the next few years, so it could turn into a great deal still.