Most BRRR investors call their lender when the rehab feels done. They schedule an appraisal, wait three weeks, and then find out their equity position is 5% lower than expected. The refi does not work. Capital stays trapped. The next deal stalls.
The problem is not the appraisal. The problem is calling your lender before you have actually run the numbers.
Here are the 7 numbers you need to know cold before you pick up the phone.
Number 1: Your Estimated ARV
After repair value is the foundation of every BRRR refinance. Get it wrong and nothing else matters.
Your ARV needs to be based on conservative comps: same zip code, similar square footage, recently sold within 90 days if possible. Most investors run 3 to 5 comps and average them. The mistake is using the highest comp instead of the median.
If your estimated ARV is $180,000 and the appraiser comes in at $165,000, your equity position just changed by $15,000. At 75% LTV, that is $11,250 less in cash-out proceeds.
Run your ARV conservatively. If the appraisal comes in higher, that is a good problem to have.
Number 2: Your Total Invested Capital
Before you refinance, you need an exact number for what you have in the deal. This means:
- Purchase price
- Acquisition costs (closing, title, transfer taxes)
- Rehab spend (every invoice, every receipt, every contractor payment)
- Carrying costs during rehab (mortgage payments, insurance, utilities, property taxes)
- PM costs if the property was tenanted during rehab
Most investors know the purchase price and a rough rehab number. They forget carrying costs, soft costs, and the small contractor payments that never made it into the spreadsheet.
That total is your at-risk capital. The refinance is supposed to return it to you.
Number 3: Your Target Cash-Out Amount
Refinancing is not about how much you can borrow. It is about how much you need to recover to make this deal work and fund the next one.
Your target cash-out should equal your total invested capital minus any amount you are comfortable leaving in the deal. For most BRRR investors, the goal is 100% capital recovery: get back every dollar so you can recycle it into the next deal.
If you invested $82,000 and your ARV is $180,000, at 75% LTV you can borrow $135,000. After paying off any acquisition debt, you net a cash-out amount. Whether that covers your $82,000 depends on your purchase price and existing debt structure. Know this number before you talk to a lender. If the math does not work at current ARV, wait for rents to season or market conditions to improve.
Number 4: Your Post-Refi DSCR
Lenders offering DSCR loans (the most common vehicle for BRRR investors) underwrite your loan against your property's debt service coverage ratio. The formula is straightforward:
DSCR = Gross Rental Income / Total Monthly Debt Service
At a $135,000 loan at 7.25% on a 30-year term, your monthly payment is roughly $921. If your rent is $1,350 per month, your DSCR is 1.47. Most DSCR lenders want 1.20 or higher. You are comfortably in range.
But if your rehab ran long, rents came in lower than projected, or rates moved during your hold period, your DSCR might be tighter than you expect. Know this number before your lender underwrites it and comes back with a denial or a lower loan amount than you planned.
Number 5: Your Current LTV
Loan to value is what lenders use to determine how much they will lend. For DSCR cash-out refinances, most lenders cap at 70 to 75% LTV.
Current LTV = Loan Balance / Current Property Value
If your property is worth $180,000 at 75% LTV, the lender will loan up to $135,000. That is your hard ceiling. No amount of negotiation will move it. Know your maximum loan amount before you call. Do not count on getting more than the math allows.
If you have acquisition debt on the property, your net cash-out is the new loan amount minus what you owe on the existing debt. Run that calculation before the conversation, not during it.
Number 6: Your Equity Position After the Refi
This is the number most BRRR investors skip. They focus on cash-out proceeds and forget to calculate what equity remains in the deal after closing.
Post-Refi Equity = Property Value minus New Loan Balance
If your property appraises at $180,000 and you borrow $135,000, you have $45,000 in equity. Your equity percentage is 25%. That is your buffer against future market moves, forced vacancies, or a sale if the deal underperforms.
A healthy equity position is typically 20 to 30% post-refi. Below 20% and you have very little cushion if values soften or you need to exit the deal unexpectedly.
Number 7: Your Monthly Cashflow After the Refi
After the refinance, your payment goes up. Your acquisition loan is replaced by a larger long-term DSCR loan at a new rate. You need to know what your monthly cash flow looks like under the new payment before you commit.
Post-Refi Cashflow = Monthly Rent minus (PITI + PM Fee + Maintenance Reserve)
If your rent is $1,350, your PITI is $921, your PM fee is $135 (10%), and your maintenance reserve is $100, your monthly cash flow is $194.
That is above the $150 per month floor that makes a BRRR deal worth executing when you have recovered 100% of your capital. You own the property with zero dollars left in it. $194 per month on zero invested capital is effectively an infinite return on equity.
If the refi payment pushes your cashflow below $100 per month, the deal's economics are marginal. You need to decide whether holding the asset with minimal monthly income is the best use of the recovered capital or whether a different deployment makes more sense.
Why Running These 7 Numbers in a Spreadsheet Is the Wrong Move
If you are tracking these numbers in a spreadsheet, you are recalculating them manually every time a rent changes, a rate moves, or a contractor sends a final invoice. One missed expense or stale comp and your entire refi analysis is off.
DoorVault tracks all 7 metrics automatically across every deal in your pipeline. Knox Intelligence processes every rehab receipt, PM invoice, and closing document you upload or forward. The Equity Tracker updates your LTV and equity position in real time as new data comes in. The Loans Dashboard calculates your post-refi DSCR and cashflow projection the moment you enter your loan terms.
The BRRR Pipeline view shows every deal from acquisition through rehab, rent placement, and refinance readiness. When you are ready to call your lender, you pull up the deal and all 7 numbers are already there. No spreadsheet math. No recalculating from scratch. No surprises at the appraisal.
The BRRR strategy works when every dollar in the deal is accounted for. Knox Intelligence makes sure it is.
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