Reference
Questions the model should answer.
Six short answers about the BRRRR calculator and the arithmetic behind it. For the full explanation, read the guide.
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. You buy a property that needs work, renovate it, rent it out, refinance it at its after-repair value, and use the returned capital for the next deal.
What is the difference between cash left and cash pulled out?
Cash left is the capital still tied up in the property after the refinance, floored at zero. Cash pulled out is capital returned to you above your original contribution. It is not profit: you still own the property and still owe the new loan.
What DSCR does a BRRRR property need?
A DSCR of 1.20 is a common underwriting threshold, meaning net operating income covers debt service 1.2 times. Lenders vary by product, market and borrower, and some require more. The calculator marks 1.20 as a test, not a universal rule.
Why test DSCR at the refinance rate plus 200 basis points?
The stress test keeps the loan amount and term fixed and raises the rate by two percentage points. It checks whether the property still covers its debt if rates move before closing or at a later reset. It is a boundary check, not a forecast.
How does the max-offer solver work?
The solver holds every other assumption fixed and binary-searches the purchase price. At each price it rebuilds the acquisition loan, holding costs, refinance payoff and cash-out, then measures cash left. It returns the highest price where cash left stays at or below your target.
What does the BRRRR model leave out?
Income tax, depreciation, capital gains, property appreciation, rent growth, lease-up, construction overruns, lender reserves, seasoning rules and entity costs. It is a planning model based on the assumptions you enter, not financial, tax or legal advice.
UtilityLab is not a lender, broker, appraiser, tax adviser or investment adviser. Nothing on this page is financial, tax or legal advice.