The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) method is a real estate investment strategy that allows investors to grow their portfolios while minimizing cash outlays. Use this calculator to evaluate the potential returns of your BRRRR investment.
Interactive Calculator
Results
Data Source and Methodology
All calculations are based on standard real estate investment formulas and data. Please consult with a financial advisor for personalized advice.
The Formula Explained
ROI Calculation: \[ ROI = \left(\frac{\text{Annual Cash Flow}}{\text{Total Cash Invested}}\right) \times 100 \]
Glossary of Variables
- Property Price: The purchase price of the property.
- Rehab Cost: The cost of renovations and repairs.
- Rental Income: The monthly income generated from renting the property.
- Refinance Amount: The amount received from refinancing the property.
How It Works: A Step-by-Step Example
Imagine purchasing a property for $150,000 with rehab costs of $30,000. You rent it out for $1,500/month and refinance for $160,000. Calculate your ROI using the above formula to assess profitability.
Frequently Asked Questions (FAQ)
What is the BRRRR method?
The BRRRR method is a real estate investment strategy that involves buying a property, rehabbing it, renting it out, refinancing it, and repeating the process.
How do I calculate ROI?
ROI is calculated by dividing the annual cash flow by the total cash invested and multiplying by 100 to get a percentage.
What are the risks of the BRRRR method?
Risks include unexpected rehab costs, difficulty in finding tenants, and fluctuations in property values.
Can I use the BRRRR method in any market?
While the BRRRR method can be used in various markets, success depends on market conditions, property management, and financing opportunities.
What is a good ROI?
A good ROI depends on individual investment goals but generally, an ROI above 10% is considered favorable.