How much cash flow do you want before doing a BRRRR?

Question

When you're analyzing a BRRRR, how much monthly cash flow do you want the property to have after the refinance?

I'm mainly interested in how people set their minimum. Do you look for a specific dollar amount per unit, a percentage of rent, or a certain return on the cash left in the deal?

I'd also be interested in how much room you leave for vacancies, repairs, taxes, insurance and other expenses when deciding whether the numbers are good enough to move forward.

For those doing BRRRRs regularly, what does your minimum look like?

Gregory Acs · Answer

I don't have a fixed dollar amount because every market is different. What I do want is enough cash flow that the property still performs if expenses come in higher than expected or you have a vacancy. A BRRRR that only works under perfect assumptions is usually too tight for me.

I'd rather accept a little less cash flow on paper if the underwriting is conservative and the property has room to absorb surprises. That tends to be a better long-term foundation than chasing the highest projected return.

J Castro · Answer

From a lender’s perspective, I’d be careful about setting a BRRRR minimum based solely on a specific dollar amount of monthly cash flow.

The more important question is whether the property can comfortably support the debt after the refinance under realistic operating assumptions.

When looking at a BRRRR, I’d want investors to consider:

🔹 True NOI — Use realistic rents and subtract taxes, insurance, management, maintenance, utilities, vacancy, CapEx reserves, and other operating expenses.

🔹 DSCR after refinance — The property needs enough stabilized income to support the proposed debt service, not just look good based on gross rent.

🔹 Cash left in the deal — This is critical. A property producing $500/month may look attractive, but if the investor has $100K of capital permanently tied up, the return on that remaining equity may be less compelling.

🔹 Conservative vacancy and repair assumptions — I would rather see a deal that works with realistic reserves than one that only works at 100% occupancy with minimal repairs.

🔹 Refinance proceeds — Don't assume the future appraisal will automatically support the desired loan amount. The refinance needs to be modeled using a conservative stabilized value and the lender's actual LTV/DSCR requirements.

🔹 Interest-rate sensitivity — If the BRRRR depends on a very low future interest rate to cash flow, that should be treated as a risk rather than an assumption.

One of the biggest mistakes I see is investors calculating:

Rent – Mortgage = Cash Flow

That isn't really cash flow. It's closer to gross cash remaining after debt service.

A stronger BRRRR analysis is:

Gross Rent → Vacancy → Operating Expenses → NOI → Debt Service → True Cash Flow

And then separately ask:

How much capital will actually remain in the property after the refinance, and what return am I earning on that capital?

From the lending side, I like BRRRRs where the investor has multiple layers of cushion—the property cash flows conservatively, the DSCR remains healthy, the refinance doesn't require an aggressive valuation, and the investor still has reserves after closing.

The exact minimum cash flow will vary by market, property type, financing structure, and investor strategy. But I’d rather see a sustainable $300–$500/month with strong reserves and conservative underwriting than a projected $1,000/month that disappears the first time the HVAC fails or the property sits vacant for a month.

The best BRRRR isn't necessarily the one that produces the highest initial cash flow. It's the one that still works when reality doesn't follow the spreadsheet.

Brian Cauldwell · Answer

Agreed with @Gregory Acs. I like to think of the upside as well. On the refinance, if you get a $20,000 higher appraised value as well, you want to make sure you have the cash flow to do a max cash-out refinance. Nothing is worse than getting a high appraisal and not being able to capitalize on it because the property doesn't cash flow, besides probably getting a low appraisal on the refinance lol

Gregory Acs · Answer

@Brian Cauldwell I just did a cash out refi for someone and his appraisal came in $40k higher. He was pretty happy that $36k more of cash magically appeared.

Alison Robinson · Answer

When I was acquiring properties, I targeted about $4,000 in annual cash flow per property after accounting for normal operating expenses.

Cash flow was my primary metric, but I never looked at it in isolation. I used a scorecard that also considered cash-on-cash return, operating expense percentage, gross rent multiplier, initial cash investment, purchase discount, and longer-term cash flow potential.

For me, the minimum cash flow was really a screening threshold. The broader question was whether the property produced enough cash flow and had enough margin in the rest of the deal to justify the capital and risk.

Ashish Acharya · Answer

@Ali Najjar, The specific minimums, dollar per unit, percentage of rent, or cash on cash target, are more of an underwriting preference other active BRRRR investors here can speak to directly.

Where the tax side matters as you're setting those minimums, factor in cost segregation before finalizing your numbers. A BRRRR that looks marginal on straight cash flow can look meaningfully better once you account for the accelerated depreciation from a cost seg study, that's not cash flow exactly, but it's real tax benefit that offsets other income if you're materially participating or otherwise able to use the losses, worth including in how you're evaluating whether a deal clears your bar. Also keep the refinance interest tracing clean once you pull cash back out, that's what keeps the new loan's interest fully deductible against the rental income, and don't forget that any interest paid during the rehab period before the property's placed in service typically gets capitalized rather than deducted, that's an easy one to miss when running the numbers upfront.

Happy to connect!

Christopher Hall · Answer

I wouldn’t use a single cash-flow number. For me, the post-refinance property needs to deliver:

• At least $200–$300 per unit in monthly cash flow after debt service and realistic reserves
• Roughly 8%–12% cash-on-cash return on the capital left in the deal
• DSCR of at least 1.25

I’d underwrite 5%–8% vacancy, repairs, management—even if self-managed—plus taxes, insurance and property-specific expenses.

The two items people often underestimate are capital drag and CapEx. Cash left trapped in the deal should still earn an acceptable return, and reserves need to reflect the actual age of the roof, HVAC, plumbing and other major systems. A BRRRR can look great until the heat pump dies or the roof leaks.

I’d also stress-test a lower appraisal, lower rent and higher refinance rate. The real question isn’t just how much cash you pull out—it’s whether the property remains a strong and resilient investment afterward especially when building equity.

How much cash flow do you want before doing a BRRRR?

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