BRRRR deal analysis: how to know if the refi will work

The BRRRR strategy works when you can refinance based on a higher post-rehab value and recover most (or all) of your initial cash.

Deals fall apart when ARV is optimistic, rehab runs long, or the refi appraisal comes in low.

The numbers you must get right

• ARV (After Repair Value)
• Rehab budget (with contingency)
• Stabilized rent
• Refi LTV and loan terms
• All-in basis (purchase + rehab + closing + holding)

A simple way to think about “will the refi work?”

At a high level:

1. Estimate ARV
2. Apply the lender’s refi LTV to ARV (e.g. 75%)
3. Compare proceeds vs your all-in cash

If proceeds are meaningfully lower than your all-in cash, you’re still fine—just don’t pretend it’s a “no money left in” deal.

Use a calculator (and stress test it)

Parcel’s BRRRR calculator makes it easy to model:

• /tools/brrrr/

Stress tests to run:

• ARV -5% and -10%
• Rehab +10% and +20%
• Refi rate +1%