Introducing: The BiggerPockets BRRRR Calculator!

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Let me ask you a question:

How would you like to spend tens of thousands of dollars fixing up a property, get it rented out, and then realize that it doesn’t actually make you any money?

Doesn’t sound too fun, does it?

My name is Brandon, author of The Book on Rental Property Investing, and today I’m excited to give you a tour of the brand-new BRRRR Calculator from BiggerPockets. This incredible tool will allow you to analyze a fixer-upper rental property — including cash flow, cash on cash return, total investment, and more — in under five minutes.

Sound too good to be true? Well, stay tuned, and I’ll show you how easy it can be.

(Watch the video below or read the transcript that follows. Or both. The choice is yours!)

What is BRRRR Investing, Anyway?

So before I show you the calculator, let’s all get on the same page on exactly what it means to “BRRRR” a property.

No, I’m not talking about buying a house in the middle of winter. I’m talking about:

  • Buying a property (usually with short-term funds like cash, private money, hard money, or a partnership),
  • Rehabbing that property,
  • Renting that property out,
  • Refinancing the property to pay off the original loan, and then
  • Repeating the process over and over.

If you want to learn more about this fantastic BRRRR strategy, read our free eBook on the subject at www.BiggerPockets.com/BRRRR.

OK, so let’s get to the tour.

First, you need to access the calculator, which you can get to by going to www.BiggerPockets.com/analysis. Once you click on the “start an analysis” button, you’ll have the choice of several different calculators. Choose the BRRRR calculator.

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Related: How to Calculate Cash-on-Cash Return

Page One of the BRRRR Calculator

The BRRRR calculator is similar to the BiggerPockets Rental Property Calculator, the Flipping Calculator, and the Wholesaling Calculator in that it contains three pages, followed by a final results page.

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Page one includes some of the basic information about the property, such as the address, the sales description, and the annual property taxes. Although only the fields with a little red asterisk are required, I’d recommend filling in as much as possible to make your final report complete. And if you plan to show the final report to others, be sure to upload as many photos as you’d like here on page one. They’ll make your report look even better later.

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Keep an eye out for these small little white question marks next to most of the fields. When you hover over these icons, you’ll find additional information that will help you learn how to fill out the calculator. So when you get stuck, don’t give up and go back to watching TV. Just hover over the question marks and learn how to find the information needed.

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Page Two of the BRRRR Calculator

The second page includes the financial information related to buying the property. At the top, you’ll enter information, such as the purchase price, the after repair value, the closing costs, and the repair costs. Again, if you aren’t sure how to find any of this information out, simply hover over the question marks, and we’ll help you out.

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Next, down the page, you’ll enter the information about the initial purchase loan details. As I mentioned earlier, the BRRRR strategy involves buying the property using short-term funding like private or hard money and then later refinancing out. This is the information for the initial purchase. For example, I might buy the property using a $100,000 loan from a private lender at 10% interest. I’ll enter that information here, as well as the time I expect to have this initial loan before refinancing.
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Related: The Investor’s Complete Guide to Calculating, Understanding & Using Cap Rates

Below that, I’m going to enter in the information for the refinance loan that I’ll get later.

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That’s pretty much it for page two, so lets move onto page three.

Page Three of the BRRRR Calculator

This page contains all the financial information for the rental side of your investment, including income and expenses. Just be sure you are using a dollar figure where a dollar figure is needed and a percentage where a percentage is needed.

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At at the bottom of page three, you have the option to enter in estimates for future assumptions, like how much the income, property value, and expenses will climb year over year. If you don’t want to make any predictions, don’t worry about it. You can always leave these blank.

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Finally, I want to point out the very last field here on page three — and that’s Sales Expenses. Although you might hold onto your property forever, chances are, you’ll end up selling the property someday and maybe buying something else. Of course, it costs money to sell a property — such as closing costs and Realtor fees — so you can enter in what percentage of the future sales price you’ll end up losing to those fees. Personally, I usually estimate between 8-10%, but talk with a local real estate agent to get an accurate percentage for your area.

When you’ve entered all the date, you can now click the “Calculate Results” button and see all the numbers you need to make a decision.

The Results of Your BRRRR Analysis

Finally, on the results page, we can see a summary of all the data you entered and some pretty amazing estimates, including the monthly cash flow, the cash on cash return, the total cash needed when you purchase the property, the total cash you’ll leave in the deal after the refinance, and much more.

Also, keep in mind that because you are potentially obtaining two different loans for this BRRRR deal, you can click between “acquisition” and “refinance” to see your estimates before and after your refinance. You might find that during the initial acquisition phase, your cash flow is small or even negative, but after the refinance, it might tell a whole different story.

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Finally, as you scroll down the results page, you’ll see a lot more really awesome data, including a breakdown of your income and expenses, how your property compares to the infamous 2% rule, and a chart that helps you estimate what the future might hold for your property with some colored graphs to drive the point home.

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The last thing I want to show you before I complete this video is this: the “More Actions” button.

Here, you’ll find some really cool other things you can do with your final report, including the ability to generate a PDF report and send it to a lender, partner, your spouse, or whoever. You can also copy your calculation to another BiggerPockets user or reanalyze your entire deal using one of the other calculators — without needing to enter all the information in again.

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BRRRR Calculator Wrap Up

You know, BRRRR investing can be one of the best ways to experience both cash flow and equity growth in an investment while minimizing the competition that you face.

However, you have to do the math right. Luckily, thanks to the new BiggerPockets BRRRR Calculator, you have everything you need to analyze your next BRRR deal in under five minutes.

Try it out for yourself today at www.BiggerPockets.com/analysis.

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

3 Comments

  1. Tim DeBellis

    Hi Brandon –

    Love the BRRRR Calculator. Have been using it over the past several days and have watched the videos as well. I did have one question / observation regarding the rental income fill in. From what I can gather the calculator assumes the rental income entered is present over the full timeframe of the acquisition period before refinancing. However, it seems that during rehab, there is the potential for partial or no income for a few months while the rehab is taking place. If this is the case then the analysis could overstate the potential returns during this period. Perhaps this may not be that big of a deal as hopefully rehab will be short but wanted to know if you thought of how to account for this potential income decrease in the initial months? Perhaps a way to input different income amounts as a function of time, e.g., 0-6 months, $XXX, 7-12 months, $YYY. Thanks in advance for your comments.

    Also, the podcasts are awesome. Learning so much. Thanks for doing what you do.

  2. John barnette on

    Brandon..Thank You. A tremendoualy valuable tool. And Tim a very valid point. I have been an investor in several Brrrr type scenarios. I have run into issues with the after repair refi and banks not wanting to accept even the increased appraised value (with their appraiser) and/or not letting me extract as much equity as I was looking for.

    One project I was able to get enough to pay off hard money loan. But that started with 30% of my own cash as down. Then my cash to fix. I wanted to refi out to be in at a total of 75% LTV non owner occupant loan. Had a tenant with good rent too. Lenders just wanted me to keep more skin in it. However…this is in San Francisco so bigger numbers.

    Just ran into similar situation with a BRRR I could have done…but I moved into the house as my own residence. Got a great below market deal on a probate. After improvements, 6 months time, it appraised $150k higher. Local portfolio lender high end bank would not allow me to access those funds. Only refi of original purchase loan amount.

    What experiences do you have with the cash out refi stage of the BRRR strategy …even with an appraisal that supports the increased value.

    All is healed with time as i was able to refi that first property in my example 1.5 yrs later and extract significant funds. I have an extra refi step

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